The analyst rating upgrade for GTHT (02611.HK) from Neutral to Buy by BofA Securities is based on several key factors:
1. Alleviation of Concerns: The anticipated 3Q25 results are expected to address market concerns regarding the asset quality of Haitong International, integration progress, and weak post-merger equity returns.
2. Potential for Upside: The report suggests that these results could reveal potential for upside equity returns and a re-assessment of the company's valuation.
3. Limited Impairment Provisions: BofA expects limited impairment provisions for Haitong International in 4Q25, indicating a more stable outlook for the subsidiary.
4. Strategic Moves: The recent announcement of acquiring an Indonesian brokerage license demonstrates GTHT's confidence in the business turnaround of Haitong International.
5. Industry Leadership: BofA Securities believes that GTHT will outperform its peers through leading profit growth in the industry, which supports the decision to name it as one of their top picks for 2026.
Overall, these factors contribute to a positive outlook for GTHT, justifying the upgrade in rating and the increase in target price from HKD17.3 to HKD20.2.
