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<Research>Citi Upgrades HANG SENG BANK to Buy, Raises TPs for BOC HONG KONG/ BANK OF E ASIA
Recommend 29 Positive 34 Negative 15 |
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The Hong Kong banking sector has risen by 37% YTD, outperforming the HSI, with BOC HONG KONG (02388.HK) showing the strongest growth, mainly benefiting from strong buy order in high-dividend targets by southbound funds, Citi Research issued a research report saying. Although the recent decline in HIBOR may pressure net interest margins, the broker predicted profitability in the banking sector to improve as HIBOR gradually returns to normal levels by 4Q25. Moreover, the capital adequacy ratio of Hong Kong banks was at a historical high, providing better visibility for enhancing shareholder returns. Based on the above analysis, Citi Research upgraded HANG SENG BANK (00011.HK) from Neutral to Buy, meanwhile keeping rating at Buy/ Neutral for BOC HONG KONG/ BANK OF E ASIA (00023.HK). Citi Research upgraded HANG SENG BANK to Buy based on 3 key factors, including that market consensus has fully reflected the expectations of an average credit cost of 50 bps between 2025 and 2027. Accordingly, the broker elevated its target price from $105 to $135. Meanwhile, Citi Research kept rating at Buy for BOC HONG KONG, and raised its target price from $33.9 to $40.8, due to its stable revenue outlook and asset quality, along with southbound funds' lower return requirements, which are expected to drive continued valuation re-rating for the stock. The broker also added its target price for BANK OF E ASIA from $11 to $11.6. AASTOCKS Financial News Website: www.aastocks.com |
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