[ET Net News Agency, 18 September 2019] UBS Global Research lowered its target price
for Bank of Communications (Bankcomm)(03328) to HK$5.8 from HK$7.1 on a weaker Renminbi
outlook and a higher COE (Cost Of Equity) assumption (from 13% to 15%) and maintained its
"neutral" rating.
Following a few quarters of very strong momentum, Bankcomm's revenue and PPOP growth
slowed in 2Q to the single-digit territory at 5.5% and 4.3%, respectively, said the
research house.
Looking ahead, UBS thinks the bank's top-line growth will remain relatively weak. While
the bank's profits will likely remain stable, the research house thinks the slowing
revenue growth, macro headwinds, and a weaker Renminbi will continue to weigh on
Bankcomm's valuation. (KL)