Daiwa Research lifted its target price for CSC Financial (06066) to HK$15 from HK$9.2 and reiterated its "buy" rating.
The research house sees CSC as a key beneficiary of China's ongoing capital market reform, with a visible short-term catalyst ahead. Daiwa believes the key objective of regulators in stepping up capital market reforms is to build internationally competitive stock exchanges to bring China ADRs home to the A-share market.
It sees CSC as having the most flexible and leading IB franchise with a strong edge in IPO underwriting (versus Equity Capital Market [ECM] as a whole) among the Chinese securities companies, and thus should benefit the most from an IPO market boom.
Daiwa raised its 2020-22 EPS forecasts by 45-68% to factor in major upgrades in key capital market assumptions and CSC's substantial market share gains in the investment
banking and wealth management segments.
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