JPMorgan Raises CMSC Target Price to HK$21, Maintains "Overweight" Rating

Deep News14:53

JPMorgan has released a research report raising the H-share target price for CMSC (06099) from HK$20.5 to HK$21, while maintaining an "Overweight" rating. The bank notes that ahead of the third-quarter earnings season, it is an opportune moment for investors to re-evaluate CMSC, believing it to be one of the few Chinese brokerages with clear company-specific earnings catalysts for the third quarter, whereas most peers in the sector remain affected by weaker trading activity and slower financing momentum during the period.

The bank points out that CMSC has the highest exposure to Changxin Technology among Chinese brokerages, corresponding to approximately RMB 27 billion in unrealized gains, yet the current share price only reflects a portion of that value. As CMSC begins to recognize related gains following Changxin Technology's listing in July, JPMorgan projects that CMSC's third-quarter earnings could grow approximately 190% year-over-year, significantly outperforming its peers.

The bank believes that the recent pullback in technology stock investment sentiment has narrowed CMSC's outperformance relative to its industry counterparts from the July peak. Ahead of the third-quarter earnings catalyst, this presents an attractive opportunity for gradual accumulation.

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