Guotai Junan Securities Co., Ltd. Class H (2611 – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Edmond Fok from DBS maintained a Buy rating on the stock and has a HK$14.50 price target.
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Edmond Fok has given his Buy rating due to a combination of factors that highlight the strong position and growth potential of Guotai Junan Securities Co., Ltd. Class H. The company has emerged as a leader in the Chinese securities industry, benefiting from a merger that has significantly bolstered its asset and equity base, positioning it well for capital-intensive business development. This merger, coordinated by Shanghai SASAC, is expected to result in smooth integration and operational efficiency.
Furthermore, the company’s strategic initiatives, such as system integration and personnel optimization, are anticipated to improve the cost-to-income ratio. Additionally, the normalization of returns from Haitong’s investment portfolio is expected to enhance profitability. Market conditions, including elevated A-share average daily turnover and increased interest in tech investments, are likely to support sustained market activity, thereby boosting fee and interest income. These factors collectively justify the upward revision of earnings forecasts and the increased target price, reinforcing the Buy rating.