[ET Net News Agency, 4 September 2019] UBS Global Research lowered its target price for
Haitong UniTrust International Leasing (01905) to HK$1.84 from HK$1.92 and maintained its
"neutral" rating.
The research house estimated Haitong UniTrust's NIM expanded by 21bps HoH, driven by a
faster expansion in asset yields (+67bps HoH) than funding cost (+54bps HoH). Taking both
interest income and service fee income into account, the comprehensive yield was up by
67bps to 8.94%, mainly driven by industrials, construction, and transportation sectors.
UBS expects continued improvement in comprehensive yield and NIM, as Haitong UniTrust
allocates more resources to MSE customers. However, the company may face some pressure on
credit costs in the near term due to its historical factoring receivables from certain
large corporate customers in distress.
UBS cut its 2019/20 earnings forecasts by 7%/9% on higher credit cost assumptions. (KL)