Bank of America Securities: Upgrades Guotai Haitong (02611) rating to "buy" with a target price of HK$20.2. Listed as the top stock pick for next year.

Bank of America Securities released a research report stating that it has upgraded its rating on Guotai Haitong (02611) H shares and (601211.SH) A shares from "Neutral" to "Buy". The target price for H shares has been increased from HK$17.3 to HK$20.2, and the target price for A shares has been increased from RMB 22.4 to RMB 23.6. In the first eleven months of this year, the stock prices of Guotai Haitong H shares and Guotai Haitong A shares have lagged behind their peers, due to market concerns about the asset quality and integration progress of HAITONG INT'L, as well as the weak return on equity after the merger. However, the bank believes that the third-quarter performance will help alleviate these concerns and unlock the potential for an increase in return on equity and revaluation. The bank expects limited impairment provisions for HAITONG INT'L in the fourth quarter, and the recent announcement of the acquisition of a securities license in Indonesia further highlights Guotai Haitong's confidence in the turnaround of HAITONG INT'L's business. The bank now has a positive outlook on Guotai Haitong and has listed it as one of its top stock picks for 2026, expecting the company to outperform its peers due to its leading industry profit growth and revaluation. The bank also predicts that the company's profit excluding one-time items will increase by 26% year-on-year in 2026, driven by market share gains, accelerated integration, deleveraging, and cost savings.