JPM Forecasts CN Bank's Revenue and Net Profit Growth in Q3 2025 to Outpace 1H25, Yet Fall Short of Q2 2025 Levels
JPMorgan's Forecast: JPMorgan predicts that Chinese banks will see revenue and net profit growth in Q3 2025, faster than in the first half of 2025 but slightly below Q2 2025 levels, with state-owned banks showing stable growth.
Earnings Leaders: Agricultural Bank of China (ABC) is expected to lead earnings growth among state-owned banks, while Postal Savings Bank of China (PSBC) is projected to have the highest growth among joint-stock banks due to year-on-year increases in net interest income.
Divergent Growth Trends: The growth trends for joint-stock banks are expected to vary, with CITIC Bank and China Merchants Bank following PSBC in earnings growth, while Minsheng Bank and Ping An Bank may experience declines in earnings.
Short Selling Insights: The report includes short selling data, indicating varying levels of short selling activity among the banks, with notable ratios for ABC, PSBC, and CM Bank.
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UBS Raises MINSHENG BANK (01988.HK) Rating to Buy, Positive on Earnings Turnaround and Valuation Adjustment
UBS Upgrade: UBS upgraded MINSHENG BANK from Neutral to Buy, citing its deep discount valuation and projected earnings improvement starting in 2026.
Earnings Forecast: The bank's earnings are expected to break even in 2026 and show positive growth from 2027, leading to potential valuation re-rating.
EPS Adjustments: UBS raised its EPS forecasts for MINSHENG BANK for 2026-2029 by 5-6%, while slightly increasing the cost of equity to 11.5% due to market volatility.
Target Price Change: UBS slightly reduced its target price for MINSHENG BANK from $5.43 to $5.30 amidst the adjustments in forecasts.
UBS Favors ICBC, CCB, CITIC Bank, and Bank of China, Maintains Positive Outlook on Chinese Banks with Over 5% Dividend Yield
Capital Injection Plans: China is considering issuing RMB500 billion in special government bonds to bolster the capital of major banks like ICBC and ABC, with an estimated RMB300 billion allocated to these banks and RMB200 billion to large insurers.
Timeline for Implementation: The capital injection could be announced as early as the first quarter of 2026, potentially leading to earlier dividend distributions for state-owned banks.
Market Trends: Following the 2025 capital injection, banks experiencing greater dilution, such as BANKCOMM and PSBC, have shown weaker performance compared to their peers.
Investment Recommendations: UBS maintains a positive outlook on Chinese bank stocks with dividend yields over 5%, favoring institutions like ICBC, CCB, CITIC BANK, and BANK OF CHINA.
HSI Rises by 361 Points, Driven by Gains in HSBC Holdings, AIA, and Alibaba; AI Stocks Soar
Hong Kong Stock Market Performance: Hong Kong stocks saw significant gains, with the HSI rising 1.4% to close at 27,126, and total market turnover reaching $254.373 billion.
Financial Sector Gains: Major financial stocks like HSBC, HKEX, and AIA experienced notable increases, with HSBC up 2.7% and AIA jumping 4.1%.
Chinese Banks and Insurers: Chinese banks and insurers also reported gains, with CITIC BANK and CHINA LIFE rising 3.3% and 6% respectively, reflecting positive market sentiment.
AI and Tech Stocks Surge: AI-related stocks surged following new product launches, with companies like BABA-W and KINGSOFT CLOUD seeing significant increases in share prices, driven by advancements in AI technology.
HSI Rises 290 Points at Midday Driven by HSBC, AIA, and Alibaba; Zijin Increases by 4%
US Stock Market Overview: The US stock market showed caution regarding tech earnings, with the DJIA rebounding 0.6% on the 26th, while the Hong Kong bourse experienced a significant morning session gain, with the HSI up 290 points or 1.1% at 27,055.
Financial Sector Performance: Financial stocks led the market upswing in Hong Kong, with notable gains from HSBC, HKEX, and AIA, alongside positive movements in Chinese banks and insurers.
Tech Sector Developments: Alibaba's stock rose 2.2% following the launch of its new inference model, while other tech stocks like Tencent and Bilibili saw mixed performances, with some gaining and others declining.
Market Activity and Short Selling: The total market turnover for the half-day in Hong Kong was HKD134.768 billion, with significant short selling activity observed across various stocks, particularly in the tech sector.
JPM Projects Increase in Chinese Banks' Share Prices This Year, Though Growth May Lag Due to Liquidity Factors; MINSHENG BANK Raised to Overweight Rating
JPMorgan's Forecast for Chinese Banks: JPMorgan predicts share price gains for Chinese banks but expects them to underperform the market in 2026, despite a projected liquidity boost from maturing time deposits.
Revenue and Profit Growth Expectations: The bank anticipates moderate improvements in revenue and profit growth for Chinese banks in 2026, driven by net interest income recovery and wealth management fees.
Stock Ratings and Recommendations: JPMorgan upgraded MINSHENG BANK's H-shares to Overweight while downgrading ABC's H-shares to Neutral, favoring high-dividend stocks like BANKCOMM and BANK OF CHINA.
Target Prices for Key Banks: The report includes updated target prices for several banks, with BANK OF CHINA and CITIC BANK rated Overweight, reflecting a positive outlook on their performance.
Apple Introduces Cross-Border Payment Feature for Chinese Users via Apple Pay
Apple Pay Expansion: Apple has expanded its Apple Pay cross-border payment services for Chinese users, allowing them to use locally issued Visa credit and debit cards for contactless payments abroad.
Supported Cards: The service will support Visa credit cards issued by ICBC, as well as Visa debit cards from CITIC Bank and China UnionPay.
UBS Raises MINSHENG BANK (01988.HK) Rating to Buy, Positive on Earnings Turnaround and Valuation Adjustment
UBS Upgrade: UBS upgraded MINSHENG BANK from Neutral to Buy, citing its deep discount valuation and projected earnings improvement starting in 2026.
Earnings Forecast: The bank's earnings are expected to break even in 2026 and show positive growth from 2027, leading to potential valuation re-rating.
EPS Adjustments: UBS raised its EPS forecasts for MINSHENG BANK for 2026-2029 by 5-6%, while slightly increasing the cost of equity to 11.5% due to market volatility.
Target Price Change: UBS slightly reduced its target price for MINSHENG BANK from $5.43 to $5.30 amidst the adjustments in forecasts.
UBS Favors ICBC, CCB, CITIC Bank, and Bank of China, Maintains Positive Outlook on Chinese Banks with Over 5% Dividend Yield
Capital Injection Plans: China is considering issuing RMB500 billion in special government bonds to bolster the capital of major banks like ICBC and ABC, with an estimated RMB300 billion allocated to these banks and RMB200 billion to large insurers.
Timeline for Implementation: The capital injection could be announced as early as the first quarter of 2026, potentially leading to earlier dividend distributions for state-owned banks.
Market Trends: Following the 2025 capital injection, banks experiencing greater dilution, such as BANKCOMM and PSBC, have shown weaker performance compared to their peers.
Investment Recommendations: UBS maintains a positive outlook on Chinese bank stocks with dividend yields over 5%, favoring institutions like ICBC, CCB, CITIC BANK, and BANK OF CHINA.
HSI Rises by 361 Points, Driven by Gains in HSBC Holdings, AIA, and Alibaba; AI Stocks Soar
Hong Kong Stock Market Performance: Hong Kong stocks saw significant gains, with the HSI rising 1.4% to close at 27,126, and total market turnover reaching $254.373 billion.
Financial Sector Gains: Major financial stocks like HSBC, HKEX, and AIA experienced notable increases, with HSBC up 2.7% and AIA jumping 4.1%.
Chinese Banks and Insurers: Chinese banks and insurers also reported gains, with CITIC BANK and CHINA LIFE rising 3.3% and 6% respectively, reflecting positive market sentiment.
AI and Tech Stocks Surge: AI-related stocks surged following new product launches, with companies like BABA-W and KINGSOFT CLOUD seeing significant increases in share prices, driven by advancements in AI technology.
HSI Rises 290 Points at Midday Driven by HSBC, AIA, and Alibaba; Zijin Increases by 4%
US Stock Market Overview: The US stock market showed caution regarding tech earnings, with the DJIA rebounding 0.6% on the 26th, while the Hong Kong bourse experienced a significant morning session gain, with the HSI up 290 points or 1.1% at 27,055.
Financial Sector Performance: Financial stocks led the market upswing in Hong Kong, with notable gains from HSBC, HKEX, and AIA, alongside positive movements in Chinese banks and insurers.
Tech Sector Developments: Alibaba's stock rose 2.2% following the launch of its new inference model, while other tech stocks like Tencent and Bilibili saw mixed performances, with some gaining and others declining.
Market Activity and Short Selling: The total market turnover for the half-day in Hong Kong was HKD134.768 billion, with significant short selling activity observed across various stocks, particularly in the tech sector.
JPM Projects Increase in Chinese Banks' Share Prices This Year, Though Growth May Lag Due to Liquidity Factors; MINSHENG BANK Raised to Overweight Rating
JPMorgan's Forecast for Chinese Banks: JPMorgan predicts share price gains for Chinese banks but expects them to underperform the market in 2026, despite a projected liquidity boost from maturing time deposits.
Revenue and Profit Growth Expectations: The bank anticipates moderate improvements in revenue and profit growth for Chinese banks in 2026, driven by net interest income recovery and wealth management fees.
Stock Ratings and Recommendations: JPMorgan upgraded MINSHENG BANK's H-shares to Overweight while downgrading ABC's H-shares to Neutral, favoring high-dividend stocks like BANKCOMM and BANK OF CHINA.
Target Prices for Key Banks: The report includes updated target prices for several banks, with BANK OF CHINA and CITIC BANK rated Overweight, reflecting a positive outlook on their performance.
Apple Introduces Cross-Border Payment Feature for Chinese Users via Apple Pay
Apple Pay Expansion: Apple has expanded its Apple Pay cross-border payment services for Chinese users, allowing them to use locally issued Visa credit and debit cards for contactless payments abroad.
Supported Cards: The service will support Visa credit cards issued by ICBC, as well as Visa debit cards from CITIC Bank and China UnionPay.
