[ET Net News Agency, 9 February 2018] HSBC Global Research lifted its target price for
Bank of China (BOC)(03988) to HK$5.8 from HK$4.7, and maintained its "buy" rating.
The research house cut its 2017 earnings forecast by 6%, mainly on the lower non
interest income and higher provisioning; it also cut its 2018 earnings forecast by 2% as
the higher net interest income and lower provisioning are offset by the lower non interest
income.
HSBC said BOC has the most international exposure among China banks, which implies USD
and HKD exposure and likely NIM expansion on USD and HKD rate hikes. BOC has strategic
focuses on RMB internationalization and the Belt and Road Initiative (BRI). BRI credit
lines reached US$80bn (or 2.8% of total assets) in 1H 2017.
But it also noted that BOC has higher-than-peers' exposure to three risky industry
sectors in terms of higher NPL ratios. The NPL ratio trend remains unclear - it
deteriorated 3bp q-o-q in 3Q 2017, following a 7bp improvement in 2Q. (KL)
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03988 BANK OF CHINA
Nominal 
3.490 +0.030 (+0.867%) Others
09/02/2018 14:54
[I-bank focus]HSBC lifts Bank of China (03988) to HK$5.8
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