Goldman Sachs lifted its target price for Bank of East Asia (BEA) (00023) to HK$17.5 from HK$17.2 and maintained its "neutral" rating.
The research house said BEA reported 2H 2020 EPS was 3% higher than Goldman's estimate; the weaker-than-expected net interest income was offset by higher non-interest income. The PPOP (pre-provision operating profit) was in-line.
Goldman revised its 2021/22/23 EPS forecasts by 2%/2%/0% to factor in the trends: lower NIM in 2H 2020, strong growth in non-interest business. It noted that BEA remains one of the few local banks that has not yet been acquired. Hence, M&A could lead to a valuation multiple expansion.
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