[ET Net News Agency, 13 January 2021] Morgan Stanley lowered its target price for BOC
Hong Kong (BOCHK) (02388) to HK$23 from HK$24 and maintained its "equal-weight" rating.
The research house cut its 2020/21/22 EPS forecasts for BOCHK by 0.4%/5.9%/5.5%. For
2021 and 2022, Morgan lowered non-interest income estimates given it is unlikely that
strong bond portfolio disposal gains will be repeated. It also lowered credit cost charges
as underlying asset quality trends are likely to be much stronger than it previously
expected.
Given its large capital base and low loan to deposit ratio, BOCHK has one of the
strongest balance sheets among Asian banks, Morgan said. It expects continued NIM pressure
as HIBOR/LIBOR stay low and Morgan does not expect a meaningful rebound in short term;
hence, profitability for BOCHK should continue to be low unless rates see a big pickup.
(KL)