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<Research> BofAS Raises STANCHART (02888.HK) TP to HKD227 on Positive Cost Guidance, Rating Neutral
Recommend 4 Positive 2 Negative 3 |
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BofAS issued a research report noting that STANCHART (02888.HK) announced new medium-term targets at its May investor day, including a return on tangible equity (ROTE) of above 15% by 2028, revenue CAGR of 5% to 7% from 2025 to 2028, and a cost-to-income ratio of below 57% by 2028. Although the 2028 ROTE target is broadly in line with market expectations, the broker sees upside potential, particularly in revenue and impairments. It is constructive on wealth management growth driven by continued diversification in Chinese residents’ asset allocation needs, while the Corporate and Investment Banking (CIB) business is also expected to benefit from RMB internationalization and the structural trend of Chinese enterprises expanding overseas. The broker noted that management provided confident cost guidance, targeting a reduction in the cost-to-income ratio to around 57% by 2028, which would significantly enhance cost efficiency. However, on capital allocation, the new guidance implies that more capital than expected may be required to support growth, potentially leading to slower overall growth in return on equity and a lower total cash yield. BofAS reiterated its Neutral rating on STANCHART. Taking into account upward revisions to earnings forecasts, it raised the TP from HKD209.8 to HKD227. (da/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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