HSBC Maintains Buy Rating for BOC, Reduces Target Price

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A new report from HSBC Securities maintains a buy rating for Hong Kong stocks of Bank of China (03988), with a reduced target price.

HSBC Securities has reduced its target price for BOC stocks from HKD4.5 to 4.4, after dialling down its per share earnings projections for the period from 2017 to 2018 by roughly 2%.

Its report states that BOC’s management are still cautious about its net interest spread and asset quality in 2017, noting that 2016 annual net profits declined by 4%, falling short of market expectations.

HSBC nonetheless maintains a “Buy” rating, anticipating that the bank will benefit from ongoing depreciation of the RMB and interest rate increases in the US.

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