[ET Net News Agency, 20 October 2020] Morgan Stanley cut its target price for Chongqing
Rural Commercial Bank (CQRC)(03618) to HK$3.1 from HK$3.9 and maintained its "overweight"
rating.
The research house believes the key concern on China banks has shifted from macro/NPL
risks to uncertainties from policy window guidance, which has reduced the chance of
excessive ROE at state-owned China banks when GDP growth and credit demand finally slows
in the future.
Morgan CQRC Bank has a relatively liquid balance sheet among the China banks under its
coverage. However, the regional economic slowdown in Chongqing, partly dragged by a
slowdown in China's automobile industry, could weigh on the bank's asset quality. (KL)