HSBC Global Research lowered its target price for GF Securities (GFS)(01776) to HK$11.2 from HK$12 and maintained its "buy" rating.
The research house said GFS' net profit grew by 45% in 1H on the back of a strong recovery in investment income, despite RMB395m contingent liabilities being further charged on the liquidated overseas fund (Pandion). HSBC believes GFS still has a strong franchise in both investment banking and asset management, as well as a solid wealth management business.
However, the 6-month restriction on new businesses and regulatory rating downgrade to "BBB" imposed by CSRC could add uncertainties about earnings stability, HSBC noted.
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