by winston » Fri Jun 24, 2016 12:12 pm
not vested
<Research Report>G Sachs: BANK OF E ASIA 1H16 Profit Seems to be Worse than Expected; Target Cut to $23
Goldman Sachs, in its report, predicted the NIMs of BANK OF E ASIA (00023.HK) in 1H16 is lower than 2H15, with a flattish balance sheet and weaker-than-expected credit quality.
Cost management is a key focus, but the broker does not expect it to bear fruit in the short run, so the broker reinstated the rating Sell.
The broker reduced the EPS forecast for 2016/17/18 by 9%/7%/5%, and trimmed the target price from $23.8 to $23.
Under the M&A expectations, the share price of Bank of East Asia has surged over 40% from the February low (compared to HSI up 10%), and the current price seems to be pricing such expectations.
However, Lee's family members have not said in public that they intend to sell the bank. The broker believed that the falling consensus and the high valuation may pose stress on the share price after the result announcement.
Goldman Sachs said the credit growth in Hong Kong is weak, and the share price may be dragged by the large Hong Kong portfolio of the bank (about 42% of loans) and worsening trend in China NPL ratio.
Source: AAStocks Financial News
It's all about "how much you made when you were right" & "how little you lost when you were wrong"