JP Morgan Raises CICC Target to HK$24, Upgrades Broker Sector

Edgen Stock·Mar 20 2026, 08:30

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Key Takeaways

J.P. Morgan has reinitiated coverage on Chinese brokers with a positive outlook, citing an expected re-rating driven by strong business fundamentals and what it deems overly conservative market expectations for trading volumes. The bank sees current valuations as a compelling entry point for investors.

J.P. Morgan named CICC (03908.HK) its top pick, raising its price target to HK$24 from HK$21.2, anticipating it will benefit from a recovery in IPO and institutional business.
Several brokers received significant upgrades, including GF Securities (01776.HK), which was moved to "Overweight" with a price target increase of over 72% to HK$19.8.
The bank views upcoming first-quarter 2026 results as a key catalyst, arguing that valuations for A- and H-share brokers are currently below their long-term averages.

JP Morgan Lifts CICC Target to HK$24 on Recovery Hopes

J.P. Morgan has designated China International Capital Corp (CICC) as its top pick in the Chinese brokerage sector, raising its price target to HK$24 from a previous HK$21.2. The bank's analysts identify CICC as a primary beneficiary of an anticipated recovery in initial public offerings and institutional business activity. This bullish view is part of a broader reinitiation of coverage on the sector, which J.P. Morgan believes is poised for a re-rating due to strong business momentum, a supportive regulatory environment, and attractive valuations.

Sector-Wide Upgrades Signal Broader Confidence

Beyond its top pick, J.P. Morgan issued several notable upgrades across the sector, signaling widespread confidence. GF Securities (01776.HK) saw its rating lifted from "Neutral" to "Overweight" and its price target increased by over 72% from HK$11.5 to HK$19.8. Similarly, both CMSC (06099.HK) and CITIC Securities (06030.HK) were upgraded from "Neutral" to "Overweight," with CMSC's target price rising to HK$16.4.

The investment bank's core thesis is that the market's forecast for the sector's average daily turnover (ADT) is excessively conservative. It contends that the valuations of both A-share and H-share listed brokers are trading below their long-term averages, creating a compelling buying opportunity. J.P. Morgan points to the announcement of first-quarter 2026 results, expected in April, as a key catalyst that could trigger this sector-wide re-rating.