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<Research>Citi Expects ABC to Amplify Quarterly Results' Positive Impact by Benefiting from Yield-Seeking Investors' Fund Rotation
Recommend 6 Positive 6 Negative 3 |
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The market has responded positively to ABC (01288.HK)'s 2.2% YoY increase in 1Q25 net profit, given the bank's higher-than-peer NPL coverage, focus on domestic operations, strong business foundation in rural and county regions that may make it less susceptible to the impact of escalating US-China tariffs, and the management's aggressive incentive measures, Citi wrote in its report. With PSBC's A-shares going ex-dividend on April 30, investors seeking high yields may rotate funds from PSBC's A-shares to ABC's A-shares, considering the latter’s better earnings visibility and outlook, and the absence of equity dilution risk for the 2025 dividend. Citi expects this rotation of funds to further bolster the market’s positive response to ABC's quarterly results. Citi currently rates ABC as Buy, with a target price of $4.75. AAStocks Financial News |
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