[ET Net News Agency, 19 June 2019] Daiwa Research lowered its target price for China
Galaxy Securities (CGS)(06881) to HK$4.4 from HK$8 and downgraded its rating to "hold"
from "outperform".
The research house believes CGS is in a less favourable position than its peers amid
fiercer competition among China securities firms. CGS still relies heavily on its
brokerage segment, which contributed 76% of its operating revenue and 112% of its pre-tax
profit in 2018. The company has the highest earnings sensitivity to A-share ADT (Average
Daily Turnover) among peers.
Daiwa estimated that a 10% change in ADT from its base case of CNY525bn for 2019 would
lead to a 6% net profit change for CGS, versus an average of 4% for its peers. (KL)
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06881 CGS
Nominal 
3.870 -0.020 (-0.514%) Research Report
19/06/2019 13:59
[I-bank focus]Daiwa lowers CGS (06881) to "hold" & HK$4.4
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