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<Research>JPM Cuts BANKCOMM TP to $5.8 as CN's Equity Injection into Large SOE Banks May Dilute EPS
Recommend 50 Positive 65 Negative 60 |
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According to a JPMorgan report, there are market rumors about China planning to inject RMB1 trillion into large state-owned (SOE) banks. If new shares are issued at 1x trailing book, JPMorgan estimated that it could dilute ROE by 56 bps and EPS by 7.1%. If issued at the market price, it could dilute EPS by 11.2%. JPMorgan believed there is absolute upside potential if the current rebound in SOE banks continues. However, due to concerns about national service risks and the asset quality cycle, the performance of SOE banks may underperform the market and high-growth bank stocks (such as CMB and SPDB). JPMorgan lowered the TP for BANKCOMM (03328.HK) from $6.1 to $5.8, with a Neutral rating. AAStocks Financial News |
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