Morgan Stanley: Upgrades CICC (03908) to "Overweight" with a target price of HK$21.

Morgan Stanley released a research report, stating that the rating of CICC (03908) has been upgraded from "in line with the market" to "buy", with the target price raised from 12.8 Hong Kong dollars to 21 Hong Kong dollars. The bank expects CICC's return on equity to bottom out at 5.3% in 2024 and rise to 8% in 2026, benefiting from CICC's high sensitivity to the Hong Kong market's profitability and leading market share, which can alleviate concerns about cost income and drive re-rating. The bank stated that 25% of CICC's revenue and 45% of gross profit in the first half of last year came from overseas markets, making it the highest among the brokerages covered by the bank. The bank indicated that the increase in risk appetite in the Hong Kong market should support a significant rebound in the number of IPOs in the coming years. The bank has raised its net profit forecasts for the company for last year, this year, and next year by 5.3%, 15.3%, and 32.6% respectively.