[ET Net News Agency, 10 January 2018] Nomura Research lifted its target price for CITIC
Securities (06030) to HK$24.91 from HK$24.25, and maintained its "buy" rating.
The research house said the market share of CITIC Sec's IPO underwriting operations
improved to 8.6% in 11-month 2017 from 7.3% in FY2016, and the market share of debt
underwriting increased to 11.1% in 11-month 2017 from 6.9% in FY2016.
Its market share of margin finance rose to 6.8% from 6.7% in FY2016, while its AM
business retained its #1 market share position in 1H 2017.
Nomura believes that more strict and systemic regulations favour bigger players, as they
usually have better risk management systems and are less aggressive (and, therefore, less
likely to be restricted by regulations), while the ratings of securities matter more now
(easier for larger brokers to get higher ratings) as regulations favour high-rated
players.
It also thinks Citic will likely benefit the most from market normalisation - which
would pave the way for the further return of bailout funds by the Security Finance
Corporation, potential growth of the derivatives market, pension investments into the
secondary market and other capital market developments. (KL)