Huatai Securities: GF Securities' refinancing aids capital expansion and internationalization, maintaining a "Buy" rating

Huatai Securities research report pointed out that GF Securities (01776.HK) recently released a proposal to raise over HKD 6 billion through the placement of H shares and the issuance of zero-coupon convertible bonds, all of which will be used to increase capital for its overseas subsidiaries. If the fundraising is successful, it will effectively strengthen the company's capital strength and promote the company to further expand its international business, with operating performance and industry ranking expected to reach new heights. The company's asset management business advantages are solid, and refinancing will enhance capital and international business strength.

Considering that this financing still has uncertainties, it has not yet been included in the profit forecast. Huatai Securities maintains its forecast for the company's net profit attributable to shareholders for 2025 to 2027 at RMB 14.4 billion, 16.5 billion, and 19.1 billion (same below), corresponding to earnings per share of RMB 1.89, RMB 2.18, and RMB 2.51, with an expected BPS of RMB 22.05 in 2026.

The firm also considers that the company's refinancing is expected to enhance capital strength and strengthen international business competitiveness, giving GF Securities (000776.SZ) a valuation of 1.4 times for A shares and 1.0 times for H shares based on the price-to-book ratio, with the target price for A shares slightly adjusted from RMB 30.95 to RMB 30.87, and the target price for Hong Kong shares adjusted from HKD 27.15 to HKD 26.91, corresponding to 1.5 times and 1.2 times price-to-book ratio valuations for 2025; the rating for both Hong Kong and A shares remains "Buy."