<JPM Research> Adjusts CM BANK's Target Price to HKD60, Maintains Overweight Rating
Stock Performance: China Merchants Bank's A-shares and H-shares fell by 8% and 11% in Q3 2025, underperforming the CSI 300 Index and HSI by 26 and 23 percentage points, respectively.
Target Price Adjustments: JPMorgan reduced the target price for China Merchants Bank's H-shares from HKD61 to HKD60 and for A-shares from RMB55 to RMB54, maintaining an Overweight rating.
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G Sachs Evaluates Ratings and Price Targets for Chinese Banks (Table)
ICBC Performance: ICBC shares decreased by 1.233%, with a short selling ratio of 16.197% and a neutral rating of 5.8.
Bank of China Update: Bank of China shares fell by 1.071%, with a short selling ratio of 12.697% and a buy rating of 4.94.
CM Bank Insights: CM Bank shares rose by 0.418%, with a significant short selling ratio of 31.262% and a buy rating of 52.96.
Market Trends: Other banks like CCB and ABC also experienced slight declines, while PSBC maintained a buy rating despite a minor drop in share price.
G Sachs: Potential Capital Infusion into ICBC/ABC Could Result in Up to 7% EPS Dilution
Capital Injection Plans: Chinese authorities are set to inject RMB300 billion into two major state-owned banks, ICBC and ABC, as reported by Goldman Sachs, which did not confirm the rumor but assessed its potential impact.
Impact on Financial Metrics: If the capital injection occurs, it could lead to an estimated 4-7% dilution in EPS and a maximum of 2% dilution in BVPS, while potentially increasing the CET1 ratio by 54 to 61 basis points.
Stock Selection Preferences: Goldman Sachs favors banks with solid balance sheets that have completed capital replenishment, such as CCB, Bank of China, and CM Bank, which are seen as having greater potential for dividend increases.
Current Ratings and Uncertainties: Goldman Sachs maintains a Neutral rating on ICBC and ABC with target prices of HKD5.8 and HKD4.95, respectively, citing uncertainties regarding the capital injection's size, timing, and valuation.
UOB Kay Hian Lowers CM BANK (03968.HK) Price Target to $49, Maintains Hold Rating
Stock Performance: CM BANK (03968.HK) saw a stock increase of 1.372%, with short selling amounting to $225.89 million and a ratio of 39.339%.
Earnings Forecast: The bank expects a 1.2% YoY growth in net profit for 2025, reaching RMB150.2 billion, driven by improved net interest income and a reduced decline in non-net interest income.
Revenue and ROE Outlook: CM BANK anticipates flat revenue YoY for 2025, with a projected return on equity (ROE) decrease of 105 basis points to 13.4%.
Analyst Ratings: UOB Kay Hian maintained a Hold rating on CM BANK but lowered the target price from $52 to $49, adjusting earnings estimates for 2025 upwards by 1% while cutting forecasts for 2026 and 2027.
<Research>BOCI: ICBC Selected as Preferred Choice Among Chinese Bank H-Shares; Over RMB 50 Trillion in Deposits to be Repriced to Alleviate NIM Pressure
BOCI's Recommendations: BOCI maintains an Overweight rating on Chinese banking sector H-shares, recommending ICBC as the top pick due to its attractive valuation, along with other banks like ABC, CM BANK, CCB, PSBC, and CEB BANK.
Liability Repricing Window: The banking sector is expected to face a significant liability repricing window in 2026, which will help alleviate downward pressure on net interest margins (NIM) and support a recovery in bank profitability.
Profit Growth Outlook: Despite current NIM pressures, BOCI anticipates that the fundamentals of the banking industry will remain strong, with a slight year-on-year growth in net profit expected in 2025 and an acceleration to about 2% growth in 2026.
Short Selling Data: The report includes short selling data for the recommended banks, indicating varying levels of short selling activity and ratios, reflecting market sentiment towards these stocks.
CICC Maintains CM BANK's Target Price at HKD60.49; Strong Performance in 4Q25 Results
CICC Report on CMB: CICC has confirmed the preliminary results for 2025 from CMB, noting a slight increase in full-year revenue by 0.01% YoY and a 1.57% growth in 4Q25 revenue.
Profit Growth: The net profit attributable to the parent company rose by 1.21% YoY for the full year, with a more significant acceleration to 3.41% YoY in 4Q25.
Market Outlook: CICC remains optimistic about CMB's high dividend appeal being recognized by A-share investors, despite the ongoing low interest rate environment.
Target Price and Rating: CICC has maintained a target price of HKD60.49 for CM BANK, keeping an Outperform rating unchanged amidst current market conditions.
G Sachs Assigns Buy Rating to CM BANK; Previous Year's Results Meet Expectations
Preliminary Results: CM BANK reported preliminary results for 2025, with annual revenue of RMB338 billion and net profit of RMB150 billion, according to Goldman Sachs.
Quarterly Estimates: Goldman Sachs estimates a 2% YoY revenue growth for 4Q25 to RMB86 billion and a 3% YoY net profit increase to RMB36 billion, both slightly below their previous forecasts.
Stock Performance: CM BANK's stock is currently down by 0.129%, with short selling amounting to $125.20 million and a short selling ratio of 38.358%.
Analyst Rating: Goldman Sachs maintains a Buy rating on CM BANK, setting a target price of HKD52.96, while UBS has noted a decline in the bank's NPL coverage ratio and rated it as neutral.
G Sachs Evaluates Ratings and Price Targets for Chinese Banks (Table)
ICBC Performance: ICBC shares decreased by 1.233%, with a short selling ratio of 16.197% and a neutral rating of 5.8.
Bank of China Update: Bank of China shares fell by 1.071%, with a short selling ratio of 12.697% and a buy rating of 4.94.
CM Bank Insights: CM Bank shares rose by 0.418%, with a significant short selling ratio of 31.262% and a buy rating of 52.96.
Market Trends: Other banks like CCB and ABC also experienced slight declines, while PSBC maintained a buy rating despite a minor drop in share price.
G Sachs: Potential Capital Infusion into ICBC/ABC Could Result in Up to 7% EPS Dilution
Capital Injection Plans: Chinese authorities are set to inject RMB300 billion into two major state-owned banks, ICBC and ABC, as reported by Goldman Sachs, which did not confirm the rumor but assessed its potential impact.
Impact on Financial Metrics: If the capital injection occurs, it could lead to an estimated 4-7% dilution in EPS and a maximum of 2% dilution in BVPS, while potentially increasing the CET1 ratio by 54 to 61 basis points.
Stock Selection Preferences: Goldman Sachs favors banks with solid balance sheets that have completed capital replenishment, such as CCB, Bank of China, and CM Bank, which are seen as having greater potential for dividend increases.
Current Ratings and Uncertainties: Goldman Sachs maintains a Neutral rating on ICBC and ABC with target prices of HKD5.8 and HKD4.95, respectively, citing uncertainties regarding the capital injection's size, timing, and valuation.
UOB Kay Hian Lowers CM BANK (03968.HK) Price Target to $49, Maintains Hold Rating
Stock Performance: CM BANK (03968.HK) saw a stock increase of 1.372%, with short selling amounting to $225.89 million and a ratio of 39.339%.
Earnings Forecast: The bank expects a 1.2% YoY growth in net profit for 2025, reaching RMB150.2 billion, driven by improved net interest income and a reduced decline in non-net interest income.
Revenue and ROE Outlook: CM BANK anticipates flat revenue YoY for 2025, with a projected return on equity (ROE) decrease of 105 basis points to 13.4%.
Analyst Ratings: UOB Kay Hian maintained a Hold rating on CM BANK but lowered the target price from $52 to $49, adjusting earnings estimates for 2025 upwards by 1% while cutting forecasts for 2026 and 2027.
<Research>BOCI: ICBC Selected as Preferred Choice Among Chinese Bank H-Shares; Over RMB 50 Trillion in Deposits to be Repriced to Alleviate NIM Pressure
BOCI's Recommendations: BOCI maintains an Overweight rating on Chinese banking sector H-shares, recommending ICBC as the top pick due to its attractive valuation, along with other banks like ABC, CM BANK, CCB, PSBC, and CEB BANK.
Liability Repricing Window: The banking sector is expected to face a significant liability repricing window in 2026, which will help alleviate downward pressure on net interest margins (NIM) and support a recovery in bank profitability.
Profit Growth Outlook: Despite current NIM pressures, BOCI anticipates that the fundamentals of the banking industry will remain strong, with a slight year-on-year growth in net profit expected in 2025 and an acceleration to about 2% growth in 2026.
Short Selling Data: The report includes short selling data for the recommended banks, indicating varying levels of short selling activity and ratios, reflecting market sentiment towards these stocks.
CICC Maintains CM BANK's Target Price at HKD60.49; Strong Performance in 4Q25 Results
CICC Report on CMB: CICC has confirmed the preliminary results for 2025 from CMB, noting a slight increase in full-year revenue by 0.01% YoY and a 1.57% growth in 4Q25 revenue.
Profit Growth: The net profit attributable to the parent company rose by 1.21% YoY for the full year, with a more significant acceleration to 3.41% YoY in 4Q25.
Market Outlook: CICC remains optimistic about CMB's high dividend appeal being recognized by A-share investors, despite the ongoing low interest rate environment.
Target Price and Rating: CICC has maintained a target price of HKD60.49 for CM BANK, keeping an Outperform rating unchanged amidst current market conditions.
G Sachs Assigns Buy Rating to CM BANK; Previous Year's Results Meet Expectations
Preliminary Results: CM BANK reported preliminary results for 2025, with annual revenue of RMB338 billion and net profit of RMB150 billion, according to Goldman Sachs.
Quarterly Estimates: Goldman Sachs estimates a 2% YoY revenue growth for 4Q25 to RMB86 billion and a 3% YoY net profit increase to RMB36 billion, both slightly below their previous forecasts.
Stock Performance: CM BANK's stock is currently down by 0.129%, with short selling amounting to $125.20 million and a short selling ratio of 38.358%.
Analyst Rating: Goldman Sachs maintains a Buy rating on CM BANK, setting a target price of HKD52.96, while UBS has noted a decline in the bank's NPL coverage ratio and rated it as neutral.
