HSBC Global Research lowered its target price for China Merchant Securities (CMSC)(06099) to HK$11.8 from HK$12.5 and maintained its "buy" rating.
The research house said CMSC's net profit grew 121% in 1H, due to a turnaround in investment income amid better market conditions. HSBC believes the company's competitiveness in wealth management will provide long-term support, but CMSC also has a leading position in the prime brokerage business.
That said, HSBC believes CMSC may need to undergo more strategic changes in the near term. Moreover, the planned rights issue could be also dilutive to ROE in the near term.
10/10/2019 15:58
{I-bank focus}HSBC trims CMSC (06099) to HK$11.8; "buy
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