[ET Net News Agency, 5 March 2018] Credit Suisse lifted its target price for China
Everbright Bank (CEB)(06818) to HK$4 from HK$3.7, but downgrade its rating to
"underperform" from "neutral" due to relatively high exposure to shadow-banking-related
activities than its peers.
The research house said CES's total revenue growth was weak in 9-month 2017 at -3% YoY
due to an 8% decline in net interest income. Bottom-line growth of 4.1% YoY in 9-month was
boosted by recognising lower provisions (credit cost down 31 bp YoY). Asset quality was
stable with the non-performing loan (NPL) ratio flat QoQ at 1.58%. NPL coverage increased
2 pp QoQ to 154%, and loan loss reserve to loan ratio improved marginally (2 bp QoQ).
According to the regulations, Everbright Group cannot sell stake at <1x P/B, which means
that from a management perspective, the valuation of CEB, the key component of the Group,
cannot drop significantly lower than 1x P/B. (KL)
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06818 CEB BANK
Nominal 
2.330 -0.010 (-0.427%) Others
05/03/2018 11:59
[I-bank focus]Credit Suisse lifts CEB (06818) to HK$4
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