Chong Hing

Chong Hing yardstick for HK bank M&A

Yue Xiu Group’s potential purchase price for Chong Hing Bank reflects the economic slowdown in mainland China and competition in Hong Kong.
Hong Kong’s biggest banks - HSBC, Standard Chartered, Hang Seng Bank and Bank of China (Hong Kong) - hold about 53% of Hong Kong citizens’ deposits.
Hong Kong’s biggest banks - HSBC, Standard Chartered, Hang Seng Bank and Bank of China (Hong Kong) - hold about 53% of Hong Kong citizens’ deposits.

Yue Xiu Group’s possible purchase of Chong Hing Bank looks reasonably priced given the slowdown in mainland China and competition in Hong Kong, analysts said on Thursday, after trading in the shares of the small, family run bank was suspended, pending an announcement.

Analysts estimated the sale value at around 2.1 times 2013 price-to-book, based on Chong Hing's October 23 closing price -- slightly above the average 1.93 multiple paid for Hong Kong-based banks in recent decades, according to analysts at Goldman Sachs. 

The expected valuation of Chong Hing, which has a market capitalization of about US$2.09 billion, is nonetheless below that of some...

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