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For CSC Financial, the big-picture belief is that you are backing a leading Chinese brokerage that can turn its investment banking and capital markets franchise into fairly steady earnings, even with periodic volatility. The latest half-year results, with revenue and net income both higher than a year earlier and earnings per share jumping to CNY 0.92, strengthen that case in the short term by confirming the upbeat guidance issued in July. This may add weight to the existing value argument, given the low earnings multiple and recent share price weakness. At the same time, board turnover, including the resignation of the Risk Management Committee chair just weeks before the results, keeps governance and risk controls firmly on the radar when thinking about what could go wrong next.
However, there is a governance risk here that investors should be aware of. CSC Financial's shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.Explore 2 other fair value estimates on CSC Financial - why the stock might be worth just HK$11.80!
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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