[ET Net News Agency, 3 January 2018] Deutsche Bank said China has made containing
financial risks a top priority. Financial deleveraging may last longer than expected, with
higher market rates and more coordinated but tighter regulations.
This may lead to moderate credit growth but slower leverage build-up and hence, less
financial stability risk, the research house said.
On the banks' asset side, DB expects supply-side reform will be strictly followed and
SOE reform may accelerate, leading to improving corporate financial health. Thus, DB
stayed positive on the Chinese bank sector. It expects wider divergence between retail
banks (big-4/CMB/CRCB) and the rest, as funding strength remains the key differentiating
factor.
DB revised its target prices for the Chinese banks it covers as follows:
Name Rating Target Price
----------------------------------------------------
ICBC (01398) Buy HK$6.52 to HK$7.52
CCB (00939) Buy HK$7.68 to HK$8.87
ABC (01288) Buy HK$4.10 to HK$4.73
BOC (03988) Buy HK$4.78 to HK$5.25
BoCOM (03328) Buy HK$6.53 to HK$7.29
CMB (03968) Hold HK$26.27 to HK$31.38
CNCB (00998) Hold HK$4.67 to HK$5.28
MSB (01988) Hold HK$7.80 to HK$8.68
CEB (06818) Sell to Hold HK$3.24 to HK$3.72
CRCB (03618) Hold to Buy HK$6.05 to HK$7.00
Huishang (03698) Sell HK$3.14 to HK$3.49
BOCQ (01963) Sell to Hold HK$5.65 to HK$6.50
(KL)