{"id":331803,"date":"2025-03-07T00:25:38","date_gmt":"2025-03-06T16:25:38","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=331803"},"modified":"2025-03-07T00:25:39","modified_gmt":"2025-03-06T16:25:39","slug":"stock-in-focus-china-banking-corp-cbc-7-march-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-china-banking-corp-cbc-7-march-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: China Banking Corp. (CBC) – 7 March 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>CBC<\/td><\/tr>
Company Name<\/strong><\/td>China Banking Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>7 March 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 80.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Despite the satisfactory numbers that CBC delivered, alongside our positive view that the recent reserve requirement ratio (RRR) cut would help push the bank\u2019s earnings to greater heights, we believe that the market has already priced in this narrative. Given that CBC\u2019s share price is now slightly above our Target Price of P80.50, we maintain our HOLD rating for the bank.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Earnings in-line with estimates<\/strong><\/p>\n\n\n\n

CBC posted all-time high earnings of P24.8-Billion, up 12.7% year-on-year (YoY) and in-line with estimates of P24.5-Billion. This growth is attributable to the bank\u2019s asset base expansion with gross loans growing by 18% YoY on the back of sustained demand across all customer segments. <\/p>\n\n\n\n

Net interest income was further boosted by a 21bps expansion in the bank\u2019s net interest margins (NIM). Total deposits, on the other hand, grew by 12% YoY. We note that the bank was able to post adequate earnings growth despite taking a more proactive stance against portfolio risks which resulted in provisions for the year rising by 166%.<\/p>\n\n\n\n

Stable growth levels<\/strong><\/p>\n\n\n\n

The bank\u2019s business and consumer loans segment both posted notable growth rates of 18.2% and 17.1% YoY, respectively, which is a clear sign of stable demand for borrowings. Another metric that posted improvement was their NIMs, which expanded by 21bps YoY, with the last quarter accounting for a material portion of the margin expansion as the bank starts to feel the effects of the BSP\u2019s RRR cut last October. <\/p>\n\n\n\n

Moving forward, however, we expect that further expansion in NIMs would progressively be difficult as rates start to decline. Given this, we reiterate our view that banks will be implementing a strategic shift towards volume growth in order to sustain their earnings.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>