[ET Net News Agency, 21 August 2019] Goldman Sachs lowered its target price for Haitong
Securities (HTS)(06837) to HK$9.62 from HK$12.16 and upgraded its rating to "buy" from
"neutral".
The research house said HTS's 12-month forward rolling P/E and P/B have declined to 8.4x
and 0.6x as of 16 August, which was similar to the trough level in October 2018 (8.2x and
0.6x). However, Goldman believes the major concerns for HTS that suppressed the valuation
in October 2018, like credit risk of SPL (share pledge loans), have largely eased with the
A-share market recovery and continued contraction of its loan balance.
Meanwhile, Goldman sees earning growth potential from HTS' subsidiaries like Unitrust
Leasing and Haitong Bank which is less correlated to A-share market performance. It
estimated 82%/67% NPAT growth for HTS in 1H/2H. (KL)