France and Pakistan cut the target price of Huibin Home Appliances (1280.HK) from HK$2.55 to HK$2.15 (equivalent to 13.3 times the price-earnings ratio for fiscal year 11); it lowered its earnings per share forecast for FY10 by 3% to reflect the merger and acquisition costs associated with its acquisition of retailers in Anhui.

The bank reiterated its purchase rating of Huibin, indicating that the stock's current price-earnings ratio in 2011 was only 10 times that of its current price, the valuation was low, and that it still had sufficient cash to carry out the merger.

HSBC rose 6.88% yesterday to close at HK$1.71.