BofA Securities has released a research report reiterating its 'Buy' rating on CICC (HK: 03908) H-shares, maintaining the target price at HK$27.60.

The bank expects CICC's third-quarter net profit to reach RMB 6.1 billion, representing year-on-year and quarter-on-quarter growth of 172% and 31% respectively, primarily driven by mark-to-market investment gains from Changxin Technology (SSE: 688825), with underwriting fees and derivative income also expected to record strong year-on-year increases.

BofA Securities forecasts that CICC's net profit for the first three quarters of this year will grow 117% year-on-year, equivalent to 88% of the market's full-year earnings forecast, and representing the fastest growth rate in the industry.

The bank noted that CICC's interim profit grew 89% year-on-year, with third-quarter performance expected to be even stronger. The current disconnect between earnings performance and share price will provide investors with an attractive entry opportunity.

CICC received approval from the CSRC last month to absorb and merge Dongxing Securities (SSE: 601198) and Xinda Securities (SSE: 601059) through a share swap.

BofA Securities believes that investors are overly concerned about merger-related risks. Considering that the transaction is expected to be completed in October, with Xinda Securities and Dongxing Securities consolidated for less than three months, the bank expects limited dilution effect this year.