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2009-6-25 10:12:00 a.m. HKT, XFNA
DJ MARKET TALK:Citi Raises Bank Of Communications Target By 50.5%
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| 0952 [Dow Jones] STOCK CALL: Citigroup raises Bank of Communications (3328.HK) target to HK$7.90 from HK$5.25 after increasing FY09-11 net profit forecasts by 11%, 24%, 25% respectively, mainly due to higher loan volume, better loan mix, lower credit cost. But keeps at Sell. "We don't see any major negative catalysts for BoCom, but believe the valuations and/or growth are more compelling among our top-picks, especially China Construction Bank (0939.HK) within the big banks (cheaper P/E, P/PPOP valuations), and China Citic Bank (0998.HK) within the mid/smaller banks (cheaper P/E, P/PPOP valuations, stronger growth)." Tips less upside for BoCom. Adds, BoCom's credit cost likely somewhat higher vs peers as has lowest provision coverage in sector, NPL balance may show mild increase this year vs declines at many other banks. Shares indicated +1.3% at HK$7.97 at pre-open. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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