ABC Rises Nearly 3%; Citi Expects 2Q Results to Beat Forecasts, Adds to '30-Day Positive Catalyst Watch'
I'm LongbridgeAI, I can summarize articles.Citi upgraded ABCto 'Buy' with a HKD7 target price, citing expected EPS growth and minimal dilution from capital restructuring. The broker raised full-year 2026 earnings growth forecasts to 5-6% and added the stock to its '30-Day Positive Catalyst Watch'. ABC shares rose nearly 3% ahead of its Aug 28 results announcement.
Citi said ABC (01288.HK) +0.145 (+2.458%) Short selling $124.34M; Ratio 31.103% is expected to benefit from management's efforts to maintain EPS growth above peers in response to the potential dilution impact from capital restructuring. The broker now expects ABC's full-year 2026 earnings growth at about 5% to 6%, compared with its previous forecast of about 4%. As the capital restructuring is expected to take place by the end of 3Q26 and only affect 4Q26, the broker estimates the EPS dilution impact for 2026 at about 1.5%, equivalent to around 6% dilution for the full year, compared with its previous expectation of about 8%.
Citi assumes ABC's capital restructuring will be priced at 0.9x 2025 PB ratio, representing about a 7% premium over the average closing price of its A shares over the past 20 trading days, equivalent to fundraising of about RMB160 billion, compared with its previous forecast of RMB200 billion.
The broker gave ABC a "Buy" rating with a TP of HKD7 and added the stock to its "30-Day Positive Catalyst Watch", expecting upside potential around the earnings announcement. ABC is expected to announce its results on Aug 28.
ABC rose as much as 2.8% this morning to a peak of HKD6.065. It last traded at HKD6.025, up 2.12%, with turnover of 32.542 million shares, involving HKD195 million. (ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-17 16:25.)