Latest Search
Quote
| Back Zoom + Zoom - Top | ||||
|
<Research>DBS Adds BANK OF CHINA (03988.HK) TP to $3.9, Reiterates Buy
Recommend 24 Positive 48 Negative 24 |
||||
|
||||
|
DPS commented in a report that BANK OF CHINA (03988.HK)'s 1Q24 results were in line with expectations, with net profit down 2.9% YoY. Non-performing loan ratio declined 3 bps QoQ at the end of 1Q, the biggest lowering among SOE banks, after dropping 5 bps at the end of December last year. The broker expected improved asset quality and lower credit costs to support the lender's earnings growth. With about 19% of its assets denominated in foreign currencies, BOC's net interest margin (NIM) fell less than its peers last year. However, DBS believed that the upward trend in NIM would end this year as the US Fed's interest rate rising cycle comes to an end, while foreign exchange deposit rates rise. The underlying advantage may therefore diminish. DBS forecasted BOC's earnings to grow at a CAGR of 2.3% from FY23 to FY26. The broker believed that with the uncertainty of China's economic outlook and global interest rates likely to remain high for a longer period of time, BOC will provide diversified overseas investment opportunities and continue to attract capital inflows in the near term. DBS reiterated its Buy rating on BOC, with the target price raised from $3.7 to $3.9. However, in view of the downward pressure on profitability this year, DBS also lowered its 2024-2025 profit forecast on the lender by 3% to 4%. AAStocks Financial News |
||||
Copied to Clipboard
 |
||||
