[ET Net News Agency, 1 June 2018] HSBC Global Research cut its target price for China
Minsheng Banking Corp (01988) to HK$8.3 from HK$9.3, and maintained its "hold" rating.
The research house noted Minsheng's PB valuation reached one of its historical lows at
0.58x in 1Q18; the valuation looks cheap relative to expected ROE of 12.7% in 2018e. That
said, Minsheng may face constraints due to higher-than-peers loan-to-deposit ratio and
lower-than-peers capital ratio. The bank could be susceptible to funding costs squeeze if
the interbank rate goes up, or if regulatory tightening leads to increased RWA
concentration.
HSBC believes Minsheng is attractive on valuation and profitability, but it is also
cognizant of the uncertainties related to balance sheet adjustment and mid/longer-term
asset quality outlook. It edged down 2018/19e earnings by 0.4%/0.6% with slightly higher
credit cost estimates; it also factored in higher cost of equities and stronger USD FX
estimates. (HL)
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01988 MINSHENG BANK
Nominal 
2.920 +0.080 (+2.817%) Others
01/06/2018 11:44
[I-bank focus]HSBC cuts Minsheng Bank (01988) to HK$8.3
| Remark: | Real time quote last updated: 24/09/2024 17:59 |
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