China Merchants Securities (CMS) reported 9M10 net income of Rmb2.1bn,down 16% yoy and was 70%/72% of our and Reuters consensus FY2010E. Weview CMS’ 9M10 results as inline as we had forecasted broad basedimprovements in CMS operating results in 4Q10, particularly in brokerage andprop trading revenues. 3Q10 net income increased 16% qoq aided by reboundin prop trading gains and higher asset management fees partly offset by lowerinvestment banking fees. Key positives in 3Q10 include: 1) Improving assetmanagement fee income could provide better earnings stability, 2) operatingcost was well control with cost-to-income ratio declining to 41% in 3Q10 from45% in 2Q10. Negatives: 1) net brokerage commission fee rate declined to 6.8bps in 3Q10 vs. 7.3 bps in 2Q10 and 8.0 bps in 1Q10, although managementindicated that fee rate has rebounded modestly in late 3Q10, and 2) Investorfunds at CMS declined 19% qoq in 3Q10 as investors transferred funds back tobanks amid poor equity market performance in 3Q, a trend which likely havereversed given recent rise in % of active trading accounts. What to do with the stock。 We maintain Buy given: 1) improving A-share trading turnover and capitalmarket activity outlook, 2) its premium brokerage business with good brandname and leading institutional client base, 3) relatively more earnings benefitfrom rising A-share turnover, and 4) best indirect channel to invest in highgrowth China asset management industry vs. peers, given above-peer netincome contribution from asset management business. Our 12m target price isunchanged at Rmb25.3, based on 3.3X 2011E P/B. Risks: 1) economic doubledip, 2) sharp decline in brokerage fee rates.

我们将中信证券剔出我们的亚太强力买入名单,原因在于其股价已经突破了我们设定的12个月目标价格。然而,我们对其基本面依然持积极看法,因此维持对该股的买入评级,而且该股仍是我们看好的券商股之一。自2010年7月22日我们将中信证券加入强力买入名单以来,其股价上涨了31.1%,而上证A股指数的涨幅为17.2%。过去12个月里,中信证券的股价下跌了14.7%,而上证A股指数的跌幅为2.8%。

招商银行发布业绩预告称,今年前9 个月净利润“同比增长50%以上”(即至少为人民币196.17 亿元)。因此,该行前9 个月净利润有望符合或超过我们预测的199.82 亿元,在我们/路透2010 年全年预测中的占比至少为79%/78%。 分析。 我们认为招商银行三季度强劲的业绩是受到了以下因素推动: 1) 净息差半年环比上升(以日均资产计算,三季度净息差约为2.7%,高于上半年的 2.56%,而且净息差季环比稳定或略有上升);2) 手续费收入增长强劲,以及3) 资产质量季环比持平或改善。 潜在影响。 我们维持对招商银行A 股的买入评级(位于亚太强力买入名单)和其H 股的中性评级。基于2.65 倍2011 年预期市净率计算的A 股/H 股12 个月目标价格仍为人民币19.8 元/22.9 港元,主要下行风险:中国宏观经济二次探底;最低资本金要求和地方政府融资平台贷款拨备规定比预期更严格。主要上行风险:净息差/盈利好于预期。