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2009-6-16 11:19:00 a.m. HKT, XFNA
DJ MARKET TALK:Citi Ups Dah Sing Banking To Buy,Ups Target 185.7%
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| 1105 [Dow Jones] STOCK CALL: Citigroup upgrades Dah Sing Banking (2356.HK) to Buy from Sell, raises target to HK$10.00 from HK$3.50 on less-distressed credit cost assumptions as previous concerns assuaged by recent signs asset-quality deterioration starting to stabilize. Raises FY10-11 earnings forecasts 19%, 30%, but keeps FY09 estimates essentially unchanged as more cautious on bank's near-term outlook; notes house's FY09-10 estimates 34%, 24% above consensus. Says valuation compelling vs peers as trading below book value, cheapest HK bank under coverage. Adds, market ignoring value of DSB's 20% stake in Chongqing Commercial Bank, expects CQCB to contribute about 15% of DSB's earnings annually, estimates stake could be worth CNY1.9 billion, or 26% of DSB's current market cap. Says M&A potential could provide stock price support as number of respectably-sized independent local banks in HK has diminished. Shares +0.8% at HK$7.20; HSI down 2.5%. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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