[ET Net News Agency, 13 September 2019] Morgan Stanley raised its target price for
China Galaxy Securities (CGS)(06881) to HK$4.87 from HK$4.78 and maintained its
"equal-weight" rating.
The research house said CGS has the highest revenue contribution from brokerage business
among peers and is most sensitive to rising A-share market turnover. It is less affected
by a tight regulatory environment with lower exposure in the non-brokerage business.
Morgan said CGS' current valuation at 0.5x 2020 BVPS (book value of equity per share) is
lower than the average P/B of 0.8x for brokers under Morgan's coverage, but it believes
CGS is fairly valued given its high reliance on brokerage business, which could lead to
uncertainties amid volatile market trading volume. (KL)