Dah Sing Holdings Recommendation: Buy Brokerage: Smith New Court The acquisition of Wing On Bank has given Dah Sing access to a large deposit base, while many Hongkong banks are struggling to find growth.
Although not a China play as it has chosen not to open full branch offices on the mainland, Dah Sing is doing a lot of China trade finance from its existing Hongkong base, with a new rep office opening in Shenzhen in July.
The major re-rating on the shares is complete. The benefits accruing from pushing Wing On business through the existing network means the shares remain a buy.
Having successfully identified and developed key growth markets in the past (residential mortgages, hire purchase and trade finance) the pressure is on to find the next gravy train.
The search is likely to focus on the retail banking network and developing the personal banking market.
In recognising the network is under-utilised, Dah Sing is concentrating on developing new personal banking products.
