DBS: Raise China Construction Bank Hong Kong (02388.HK) target price to 36 Hong Kong dollars, reiterate "buy" rating.

Zhitong Finance APP has learned that DBS Bank has released a research report stating that Bank of China Hong Kong (02388.HK) witnessed a 12.9% year-on-year increase in its pre-provision operating profit to 20 billion Hong Kong dollars in the first quarter. Although the net interest margin narrowed by 6 basis points to 1.55% year-on-year, the average earning assets grew by 8.3%, driving a 3.4% increase in net interest income. Due to the growth in loan volume and superior asset quality compared to its peers, the bank anticipates that Bank of China Hong Kong will expand its loan volume and fee income during the interest rate reduction cycle, which will be the main driver of revenue growth. The bank believes that the fluctuations in the interbank lending rate in Hong Kong are temporary and will not have a significant impact on the profitability of Bank of China Hong Kong. The bank reiterated its "buy" rating on Bank of China Hong Kong, raising its target price from 34.5 Hong Kong dollars to 36 Hong Kong dollars.