[ET Net News Agency, 17 July 2018] UBS Global Research assume coveraged of Bank of
China (Hong Kong)(BOCHK)(02388) with a lower target price of HK$43.2 from HK$43.5, but
upgraded its rating to "buy" from "neutral".
Despite recent weakness along with the market, the research house said valuations for HK
banks still appear rather unattractive overall after the strong rally in 2016-17. Against
this backdrop, UBS favours BOCHK over the other two domestic HK banks from a valuation
standpoint.
It believes BOCHK has decent gearing to the current interest rate hike cycle, which
should help the bank deliver an ROTE of around 15% in the medium term as well as support
its regional expansion. It also thinks BOCHK's loan growth in its coming 1H results may
surprise positively, the debate over which has been a key driver for the stock. (KL)