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<Research>UBS Sees 5%+ CN Bank H-Shr Div. Yield Attractive, Lifting TPs Across Board; BANKCOMM Upgraded to Buy
Recommend 25 Positive 48 Negative 16 |
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According to a report released by UBS, high dividend yields and improved fundamental transparency have driven the performance of Chinese bank stocks since 2020. In the broker's opinion, the key issue now is the sustainability of dividends, which will depend on the earnings outlook and liquidity of Chinese banks. Its base case scenario predicted that Chinese banks would be able to sustain stable profit growth, resume revenue growth from 2026, and maintain a steady provisioning path. It remains upbeat about the sustainability and further increase of dividends from Chinese banks. Considering Chinese banks' H-share dividend yields of over 5% attractive, UBS raised its target prices across the board. The broker upgraded BANKCOMM (03328.HK)'s rating from Neutral to Buy and raised its target price from HKD5.95 to HKD8.6. It also reiterated a Buy rating for ICBC (01398.HK), CCB (00939.HK), BANK OF CHINA (03988.HK), and CITIC BANK (00998.HK). The target price for ICBC was lifted from HKD5.98 to HKD7.79, and for CCB from HKD7.4 to HKD10.2. However, UBS downgraded CM BANK (03968.HK) from Buy to Neutral due to its higher valuations and lower dividend yields compared to peers, though it still raised its target price from HKD52 to HKD56. AAStocks Financial News |
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