报告名称：Standard Chartered Plc(HK)(02888.HK)Next Step：Closing the 60% discount to peers
报告类型：港股研究
报告日期：2016-04-12
研究机构：摩根大通
股票名称：渣打集团
股票代码：02888
页数：55
简介：The first stage of CEO Bill Wintersˇ strategy to address StanChartˇs problemswith risk controls, asset quality and capital has made significant progress in ourview. However, the market continues to value the groupˇs $40bn tangible equity at$21bn (0.5x) and hence we believe management is now likely to turn focus toasset disposals and narrowing the performance gap to peers. In this note, we take adeep dive into regional revenue trends and conclude that with 7% underlyinggrowth across the group's markets; a turnaround post de-risking may be lesschallenging than feared. Our OW thesis is based on the view that group is likely toimprove profitability from near break-even levels in 2016 to c8% RoNAV in 2018or, failing that, management may look to realize value from some of the groupˇsattractive EM banking franchises to close the discount to TNAV. In eitherscenario, we see substantial upside and fair value for the shares at HK$75 or 0.8xP/TNAV.
Revenue growth to inflect in H2ˇ16E: A weakening revenue environment is akey investor concern; however, we believe that a strong capital ratio (12.6%)positions the group for sequential revenue growth from a weak Q4ˇ15 base.Some 60% of the revenue decline in 2015 was due to conscious managementdecisions to divest businesses, de-risking and impact of FX. Our analysis ofrevenue growth across StanChartˇs local peers highlights that underlyingrevenue growth in local currency was 7% in 2015 in the group's markets, whichunderpins the growth potential for the group.
Asset disposals to further release capital: With average risk weighting of247%, the groupˇs $8bn liquidation portfolio is a source of capital release(40bps). This along with RWA initiatives drives a rise in CT1 to 13.5% over thenext 12 months on our forecasts. We believe that the groupˇs strong capitalposition is supportive for growth and underpins valuation.
Cost savings potential underappreciated: We believe that the groupˇs LTcosts savings potential is underappreciated and we see potential for 2018 costsas low as $9.1bn (JPMe $9.7bn, cons $9.8bn) with upfront investment timelinewhich could provide an offset to a weaker revenue environment.
Q1 expectations low, JPMe 22% above 2018 consensus: While we cut ourHSBC estimates by 3%, we leave StanChart EPS unchanged with JPMe 2018EPS c23% ahead of BBG consensus. For 2016, we are broadly inline withconsensus revenue at $14.3bn. For Q1ˇ16, we forecast revenue of $3.4bn,broadly flat q/q and -23% y/y.

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