Xiaoma: The combined synergy of raising the Cathay Pacific Haitong (02611) target price to HK$18 is evident

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that Cathay Pacific Haitong (02611) operations improved and the merger showed synergy effects. The investment ratings for Cathay Pacific Haitong A Shares (601211.SH) and H shares were upgraded from “neutral” to “increased holdings”, the target price for A shares rose from RMB 20.3 to RMB 22, and the target price for H shares was raised from HK$16.3 to HK$18.

The bank added GTHT to the positive catalyst watch list in June, benefiting from a favorable industry environment based on expectations for strong results in the next quarter. The bank maintained a neutral stance at the time, as Cathay Pacific Haitong had yet to convincingly prove that Haitong's integration could translate into visible and repeatable synergies. Following the announcement of strong results for the second quarter, the bank's view has now changed. It believes that Cathay Pacific Haitong is gaining market share in key businesses, showing a higher quality trend compared to CITIC Securities (06030) and Oriental Wealth (300059.SZ). The bank also saw the merger's synergy begin to show, and expects Cathay Pacific Haitong to remain relatively resilient in the second half of the year despite a weak background in the third quarter. The bank believes that these factors should support Cathay Pacific Haitong's long-term valuation revaluation.