[ET Net News Agency, 2 April 2020] Daiwa Research lifted its target price for China
Minsheng Banking (01988) to HK$5.6 from HK$5.25 and upgraded its rating to "hold" from
"underperform" mainly on its strengthened asset quality management and control, as well as
its undemanding valuation.
The research house was previously cautious on Minsheng's balance-sheet transparency due
to its NPL recognition criteria and higher-than-industry "NPL+SML (special mention
loan)" ratio. However, both recorded some improvements in 2H 2019.
That said, Daiwa still looks for high credit costs for 2020, given its relatively risky
loan book and rising pressure in SME lending and credit-card loans due to the COVID-19
pandemic, but Daiwa believes its current credit-cost forecast of 1.9% for 2020-21 has
already reflected these concerns. (KL)