• REITERATE Buy Entry – 20.5 Target – 23.5 Stop Loss – 19.5
  • China International Capital Corp Ltd is a China-based company mainly provides investment banking services to domestic and overseas enterprises, institutions and individuals. The Company mainly operates its businesses through six segments. The Investment Banking segment mainly provides equity financing, debt and structured financing and financial consulting services for enterprises and institutions. The Stock segment mainly provides comprehensive financial services for stock business to professional investors. The Fixed Income segment mainly provides interest rate and foreign exchange, credit business, securitization business, derivatives and futures business. The Investment Management segment is mainly engaged in asset management business, fund management business and private equity investment fund business. The Wealth Management segment mainly provides wealth management products and services. The Research segment mainly provides research services to customers. 
  • Monetary easing in China. The People’s Bank of China reduced most banks’ reserve requirement ratio by 0.5 percentage point on December 15th, releasing RMB1.2tn (US$188bn) of liquidity. Meanwhile, the central bank also cut one -year loan prime rate for the first time in almost two years by 50bps on December 20th. It is viewed as some relief for the property sector. However, the central government will not compromise once property prices resurge again. Hence, the curb on the property market will continue. The easing measures are more like a seasonally tactical tweak on the macro economy as liquidity is usually tight at the end of the year. Liquidity injection will benefit the equity market to some extent as the authorities still restrict fund flows to the property market.    
  • A wave of dual listing in Hong Kong in 2022. Recently, US-listed Chinese stocks were sold off due to concerns over the VIE-based structure. Meanwhile, Didi Chuxing (DIDI US) announced it will delist from the US market and list in Hong Kong. These events could trigger another wave of dual listings in Hong Kong. CICC, as one of the largest investment banks in China could have more underwriting businesses. Furthermore, other Chinese unicorn companies are expected to choose Hong Kong as the primary listing location.    
  • Updated market consensus of the EPS growth in FY22/23 are 18.9%/21.1% YoY respectively, which translates to 7.3x/6.1x forward PE. Current PER is 8.8x. Bloomberg consensus average 12-month target price is HK$26.54.