M Stanley's Ranking of H-shr CN Banks Based on Preferences (Table)

The analyst rating for CCB (China Construction Bank) was kept at "Overweight" due to an increase in its target price to HKD 9.9 by Morgan Stanley. This suggests a positive outlook on the stock's performance, indicating that analysts expect it to outperform the market or its sector.

The analyst rating for ICBC (01398.HK) is "Neutral" with a target price adjustment from 5.81 to 5.8. The reasoning behind this rating is not explicitly stated in the provided text, but it can be inferred from the context that the overall market conditions for Chinese banks are being considered. The related news mentions that Morgan Stanley sees "absolute upside potential" for Chinese banks and anticipates a cut in the Reserve Requirement Ratio (RRR) by the People's Bank of China in the first quarter of 2026. This suggests a cautious outlook for ICBC, reflecting a balance between potential upside and current market performance, leading to a neutral stance rather than a more aggressive buy or sell recommendation.

Morgan Stanley adjusted its earnings forecasts for CCB (00939.HK) primarily due to a slower recovery pace of state-owned banks' net interest margins (NIMs), which led to a reduction in NIM forecasts for 2025-27. However, the broker also noted higher-than-expected growth in fee income for 3Q25, prompting an increase in the relevant forecasts. As a result, Morgan Stanley slightly raised its 2025 post-tax net profit forecast for CCB by 0.1%, while lowering the forecasts for 2026 and 2027 by 0.3% and 0.8%, respectively. Consequently, the target price for CCB was elevated from HKD9.5 to HKD9.9, leading to a rating of Overweight.