Daily Investment Strategy
Recommended Stock：PSB（1658）
PSB's 3Q PPOP increased by 8.8% yoy, an improvement compared to a decline of 6% in the second quarter. Driven by loan growth and improvements in asset structure, net interest income rose by 0.7% yoy and increased by 1.1% qoq. Non-interest income decreased by 0.8% yoy, with net income from fees and commissions increasing by 0.8% compared to the previous year. In the first three quarters, the total loans to customers amounted to RMB8.7trillion, representing an increase of RMB0.63trillion, or 7.74% yoy. Among them, personal loans amounted to RMB4.7 trillion, representing an increase of RMB0.2 trillion, or 5.69% yoy. Corporate loans amounted to RMB3.5 trillion, representing an increase of RMB0.37 trillion, or 11.66% yoy. On October 21, the People's Bank of China announced a reduction of 25 basis points in both the one-year and five-year LPRs, bringing them down to 3.1% and 3.6%, respectively. In fact, on October 18, six major state-owned banks had already lowered their deposit rates. Under the prohibition of manual interest supplements by banks, the bilateral rates were jointly lowered, helping to stabilize banks' net interest margins. Overall, major banks in China recorded a positive profit growth this time; among them, Postal Savings Bank showed improvement in PPOP, making it a possible choice for investors to invest using dollar cost averaging method. Target price: $5; Stop- Loss price: $4.
U.S. jobless claims fall to 5-month low as impact of two storms recedes
The core PCE Price Index rose 2.7%, higher than market expectations of 2.6%. As expected, the index rose 0.3% on a monthly basis. The U.S. Department of Labor announced that the number of initial jobless claims fell by 12,000 in the week of October 26 to a seasonally adjusted 216,000, the lowest since May. The third straight week of declines likely reflects receding distortions from Hurricanes Helen and Milton, which boosted claims in early October and kept them high through mid-October, when The Boeing strike also boosted claims for benefits.
Hong Kong Stock Connect had a net inflow of HK2.68bn on Thursday of which Xiaomi (1810) had the largest net inflow, reaching HK$0.74bn; followed by Tencent (700). Meituan (3690) recorded the largest net outflow at HK$0.42bn, followed by Geely (175).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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