DBS: China International Capital Corp – Buy Target Price HK$18.50 (Previous HK$21.50)

Beta play to catch market turning point

• 3Q23 profit to shareholders -52% y-o-y; earnings miss due to weak IPO and equity trading income amid lacklustre sentiment
• Senior management succession issue may drag strategic changes in near term, but impact should be manageable
• Revise down FY23F/24F earnings by 47%/45%, respectively, to reflect the slower-than-expected IPO recovery and fierce competition in equity derivatives
• Negatives largely in price, suggest buying on pullback to position for potential market rebound. Maintain BUY with lower TP of HK$18.5