Hong Kong Banks Sector:Resumption of coverage: sowing the seeds银行和金融服务

研究机构：大和证券(香港) 分析师： Grace ... 撰写日期：2010年12月14日

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    We resume coverage of the Hong Kong Banks Sector with a Positive rating. We expect goodearnings growth year-on-year for the Hong Kong banks in 2011 following a transitional year in2010. We also believe the sector offers good earnings visibility, as we expect continuous robustloan growth, improving fee income, and a stable asset-quality environment.
    We expect the Hong Kong banks to develop their Renminbi business further with the rolloutof more sophisticated products, which we see as new earnings-growth drivers. We believe HongKong banks’ investment in the China market has started to pay off, and that they will benefit fromloan demand in China spilling over into Hong Kong as a result of credit tightening in the Mainland.
    Our top pick is Hang Seng Bank (HSB); we resume coverage with a 1 (Buy) rating. WhileBank of China (Hong Kong)’s (BOCHK) Renminbi business has greater appeal, we believe HSB,with its strong capital and reputable brand name, is also a worthy contender and deserves a rerating.
    We have 2 (Outperform) ratings for BOCHK, Wing Hang Bank (WHB), Dah Sing BankingGroup (DSBG) and Dah Sing Financial (DSF). Renminbi developments should drive furtherindustry consolidation and we see WHB as a potential M&A candidate. We have 3 (Hold) ratingsfor Bank of East Asia (BEA), Fubon Bank (Hong Kong) (FBHK), Chong Hing Bank (CHB).