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<Research>BofAS Upgrades CSC (06066.HK) to Buy, Lifts CGS (06881.HK) TP
Recommend 26 Positive 33 Negative 26 |
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There are 110 brokers in China this year, with the top 10 brokers accounting for 73%/ 68%/ 66% of the industry's operating profit/ net profit/ total assets for 2023, BofA Securities issued a research report saying. The remaining 90+ small and medium-sized brokers shrank their room for organic growth. However, mergers and acquisitions (M&A) will be limited prior to 2024 due to a lack of shareholders' interest, regulatory scrutiny and strong financing capabilities. With these factors reversed now, especially the regulatory stance turning supportive, the broker believed that M&A opportunities in the industry will increase, and the number of brokers will decrease to around 70 by 2030. BofA Securities suggested deploying in brokers with solid fundamentals and potential to participate in market consolidation, and preferred CGS (06881.HK) and CSC (06066.HK), both of which meet the criteria. Based on valuation, the broker reiterated rating at Underperform on CITIC SEC (06030.HK), and expected overpriced brokers with limited M&A potential, such as CMSC (06099.HK), to continue to underperform. The table below summarizes BofA Securities' latest ratings and target prices on brokers: Stock│ Rating│ TP (HKD) CITIC SEC (06030.HK)│Underperform│20.05 GTJA (02611.HK)│Buy│13.08 HTSC (06886.HK)│Neutral│13.4 GF SEC (01776.HK)│Buy│12.9 CMSC (06099.HK)│Underperform│11.4 CGS (06881.HK)│Buy│7.8-> 8.8 CICC (03908.HK)│Buy│16.5 CSC (06066.HK)│Underperform-> Buy│6.8-> 10.7 DFZQ (03958.HK)│Underperform│3.95 AAStocks Financial News |
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