东亚银行(UBS1106).pdf

Global Equity Research

ab Hong Kong

Banks, Ex-S&L
UBS Investment Research
Rating Reduce 2
Bank of East Asia Price target HK$$
Price HK$$ (ADR)
Rich valuation and lacklustre ROE RIC: BBG: 23 HK

 Reiterate Reduce 2 rating
6 November 2003
We reiterate our Reduce 2 rating for BEA as we believe the stock is overvalued at
current levels. The stock has risen by 52% over the past three months and Forecast returns
outperformed the market by 30%. We believe this reflects rising liquidity and the
market’s over-reaction to the impact of economic recovery. Forecast price appreciation -%
Forecast dividend yield %

 Modest increase in our estimates Forecast stock return -%
We increased our 2004 and 2005 earnings estimates by % and % to Market return assumption %
HK$1,909m and HK$2,079m, respectively. The increase was primarily due to Forecast excess return -%
falling property and investment valuation loss as we expect property prices to DPS (03E) HK$$
based on sustained economic recovery. Trend EPS growth rate +7%


 We prefer Hang Seng Bank and Dah Sing Financial Trading data (local/US$)
We have already factored in loan growth recovery of 5% in 2004 and 2005 in our 52-wk. range HK$-$-
forecasts. We assign a predictability level