We think that the Company will be chosen as the SZ-HK stock connectsettlement bank. Therefore, the launch of SZ-HK stock connect willincrease the Company’s settlement fees business. We expect the highproportion of overseas business to benefit the Company in the followingthree aspects: First, it is expected that the Company will benefit from theincrease in US interest rates . Second, it is expected that the the Companywill benefit from the “Belt and Road” initiative. Third, it is expected that theCompany will benefit from RMB internationalization.
　　The Company's overseas subsidiary BOCHK has completed the sale of NCB,which will increase the Company's FY16 profit. The Company’ssubsidiary, BOCA has been listed on the Hong Kong Exchange. Theoverseas listing of BOCA increases the valuation of the aviation leasingsegment of BOC and thus the overall value of BOC.
　　We revise down the EPS for FY16/FY17 by 9.8% and 12.7%, respectively.
　　We project the Company’s EPS for FY16/FY17/FY18 to be RMB 0.565, RMB0.573 and RMB 0.588, up 0.1% YoY, 1.4% YoY and 2.7% YoY, respectively.
　　Considering the expected lower growth of net profit of the Company in thenear future, we downgrade our rating for the Company from “Buy” to“Accumulate”。 Meanwhile, we revise down the TP for the Company fromHK$ 4.00 to HK$ 3.72, equivalent to 5.6x FY16 PER, 5.5x FY17 PER, 0.6xFY16 PBR and 0.6x FY17 PBR.