Goldman Sachs lowered its target price for Bank of East Asia (BEA)(00023) to HK$22.4 from HK$26.5 and maintained its "neutral" rating.
The research house said BEA is a special case now on P/E as it is trading around its historical average (versus other local banks trading below), given the sizable writedown of its China commercial real estate portfolio during 1H.
Goldman said BEA remains one of the few local banks that have not yet been acquired. M&A could lead to a valuation multiple expansion. Higher China retail mix: a faster than expected shift to high margin China retail business could help near term profits.
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