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2026-04-02 10:01:10 JPMorgan Chase issued a report reiterating its positive view on Chinese banks, expecting revenue and profit growth to improve moderately, mainly benefiting from the bottoming of the interest rate cut cycle and a recovery in fee income growth. The bank expects that in a risk-off environment, state-owned banks will Outperform joint-stock banks in the short term. Its top picks are Bank of China (03988.HK), Industrial and Commercial Bank of China (01398.HK), China Construction Bank (00939.HK) and Bank of Communications (03328.HK), all rated Overweight. Target prices for the four H shares are HKD5.5, HKD7.35, HKD9.5 and HKD7.85, respectively. Among joint-stock banks, the firm prefers China Merchants Bank (600036.SH) and Industrial Bank (601166.SH), citing relatively stable profit growth and higher dividend yields. It downgraded China Minsheng Bank (600016.SH)(01988.HK) A/H shares from Overweight to Neutral due to an unexpected slowdown in revenue growth and consecutive narrowing of NIM, lowering the target price for its H shares from HKD4.4 to HKD4. It also downgraded China Everbright Bank (601818.SH)(06818.HK) A/H shares from Neutral to Underweight and cut the target price for its H shares from HKD3.1 to HKD2.7, citing a sharp profit contraction in 4Q25 and an unclear profit outlook for 2026. The report noted that Chinese banks generally expect the magnitude of NIM narrowing in 2026 to be smaller than in 2025, supporting a recovery in net interest income growth. Fee income growth is also expected to remain stable in 2026, while asset quality is seen as stable. However, guidance on impairment provisions varies among banks. China Minsheng Bank expects an increase in impairment provisions, while Ping An Bank anticipates a decline. Among the banks, management of Ping An Bank, China Merchants Bank, Postal Savings Bank of China and Agricultural Bank of China expressed optimism about the outlook for 2026. (ha/W)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |