Bank of China Hong Kong's earnings edged up a measly 2%

Will robust RMB flow boost it?

According to Nomura, net profit was reported at HKD20.9bn, up 2% y-y and 6% above consensus. "We note though that there was about HKD2.8bn recovery from the collateral of Lehman Brothers-related products back in 2011, so if excluding this impact, net profit would have increased by 15%," Nomura said.

For 2H12, net profit was up 15% y-y. Trading at FY13F P/B of ~1.8x but supported by an ROE of close to 15% and a dividend yield of around 4.6%.

"We think continued newsflow regarding offshore RMB could push the share price toward our TP while BOCHK will likely continue to be favoured by investors looking for a more stable name given the continued macro uncertainty," Nomura said.