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<Research>BOCOMI Recommends to Adopt Balanced Allocation Strategy for CN Financials for 2025, Consider Both Flexibility & Defensiveness
Recommend 38 Positive 54 Negative 19 |
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BOCOMI, in its report, expected that the stock market in 2025 will be underpinned while facing certain disturbance. It recommended adopting a balanced allocation. From the perspective of profit expectation, it laid out its pecking order of sectors in 2025: brokers > banks > insurers. In terms of valuation, BOCOMI believed that broker sector has valuation close to reasonable, while the insurance sector is still notably below the historical average. The banking sector, on the other hand, still has low valuation and high dividend attributes. The broker suggested adopting a balanced allocation strategy, taking into account both flexibility and defensiveness. For insurance industry, the 1-3Q24 saw strong performance from life insurance industry asset side and liability side, the broker said. It expected asset and liability side is facing a higher base in 2025, but is still both defensive and elastic in the current valuation level. PING AN (02318.HK) and CPIC (02601.HK) were recommended. In the banking sector, BOCOMI advised to grasp the main theme of high dividends, and appropriately increase flexibility. It forecast that the profit growth rate of listed banks will remain stable in 2025, and the ability to release provisions will continue to be a key factor in determining the profit growth rate. It recommended keeping tab on to the targets that still have room to release provisions, including state-owned banks and CM BANK (03968.HK). As for the securities industry, BOCOMI predicted the various businesses of brokers to rebound in 2025, but the valuation is already close to a reasonable level. It recommended the leading brokers with a more balanced business structure, maintaining the Buy ratings of CITIC SEC (06030.HK) and HTSC (06886.HK). AAStocks Financial News |
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