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<Research>Nomura Raises TPs for CN Banks, but Expects 1Q Earnings to Decline 2.7% on Avg.
Recommend 30 Positive 57 Negative 23 |
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Nomura estimated in a research report that the earnings of Chinese banks in 1Q24 will fall by an average of 2.7% YoY, while the earnings growth of Chinese banks covered by the broker in 1Q24 will also decline by 2.7% YoY on average, mainly due to weaker net interest margins in 1Q24, which may lead to repricing of existing mortgage and loan prime rate (LPR) cuts in FY24. The broker also lowered its net profit forecasts for covered mainland banks by 2.2% in FY24 and 3.5% in FY25, and expects earnings growth to be maintained at an average of 1% and 3% YoY in FY24 and FY25 respectively, benefiting from a reduction in impairment losses and a decline in cost-to-income ratios. The broker remained cautious on the sector due to the continued decline in net interest margins, weak fees and asset quality pressures related to the property market. Nomura maintained its Buy rating on ICBC (01398.HK) and elevated its target price from $4.73 to $5.08, maintained Buy on CCB (00939.HK) and increased its TP from $5.93 to $6.34, maintained Neutral on BANK OF CHINA (03988.HK) and raised its TP from $3.23 to $3.53, maintained Neutral on ABC and inclined its TP from $3.26 to $3.54, and maintained Buy on CM BANK (03968.HK) and added its TP from $36.44 to $40.01. AAStocks Financial News |
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