[ET Net News Agency, 10 July 2020] Daiwa Research raised its target price for Huatai
Securities (HTSC)(06886) to HK$19 from HK$16 and maintained its "buy" rating.
The research house thinks that HTSC should benefit the most from the recent strong
growth in A-share ADT (average daily turnover), due to its largest market share in the
brokerage (7.5% in 2019) and margin lending (6.6% in 2019) businesses, as well as
relatively high earnings sensitivity to ADT changes.
Daiwa also sees the relatively loose monetary environment and further capital market
reform initiatives continuing to support A-share ADT, and thus forecast full-year A-share
ADT growth to be 30%.
It estimated HTSC to see 4% higher net profit for every 10% additional growth in annual
ADT. Daiwa revised up its earnings for 2020-22 by 8-15%. (KL)