JPM: State-owned Chinese Banks' 2Q Results Beat Expectations, Regular Payout Ratio Raised for First Time; Upgrades PSBC to Overweight
I'm LongbridgeAI, I can summarize articles.JPMorgan reports that Chinese state-owned banks' Q2 results beat expectations, with revenue and profit up 9% and 6% YoY respectively. Notably, these banks raised their interim dividend payout ratio for the first time since listing. JPM upgraded PSBC to Overweight with a HKD5.9 target price but downgraded Industrial Bank to Neutral and Huaxia Bank to Underweight. State-owned banks remain top picks, maintaining Overweight ratings on Bank of China and CCB.
JPM released a report stating that the 2Q results of state-owned Chinese banks beat market expectations, with average revenue and profit growing 9% YoY and 6% YoY respectively, significantly ahead of the 1% growth and 9% decline recorded by joint-stock banks. In addition, state-owned banks raised their interim dividend payout ratio by 1 ppt. Although the increase was small, it marked the first rise in the regular payout ratio since listing, representing a positive signal for shareholder returns.
Within the bank's coverage universe, PSBC (01658.HK) +0.335 (+6.761%) Short selling $52.94M; Ratio 41.128% delivered the largest profit beat versus JPM's estimates at 6%, while CEB BANK (06818.HK) -0.170 (-5.724%) Short selling $29.78M; Ratio 40.159% was the most disappointing, coming in 37% below the bank's forecast, followed by HUAXIA BANK (600015.SH) -0.350 (-5.344%) (-33%) and INDUSTRIAL BANK (601166.SH) +0.160 (+0.918%) (-12%). Against this backdrop, the bank continued to expect state-owned banks to Outperform joint-stock banks.
The bank upgraded PSBC (01658.HK) +0.335 (+6.761%) Short selling $52.94M; Ratio 41.128% from Neutral to Overweight and raised its TP from HKD5.1 to HKD5.9. It downgraded INDUSTRIAL BANK (601166.SH) +0.160 (+0.918%) from Overweight to Neutral, and downgraded HUAXIA BANK (600015.SH) -0.350 (-5.344%) from Neutral to Underweight. Within its Chinese bank coverage, BANK OF CHINA (03988.HK) +0.295 (+5.287%) Short selling $181.62M; Ratio 20.309% and CCB (00939.HK) +0.280 (+3.063%) Short selling $342.22M; Ratio 17.586% remained the top picks, with TPs of HKD6.15 and HKD10.1 respectively, while maintaining Overweight ratings on all state-owned banks. (ha/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-28 16:25.) (A Shares quote is delayed for at least 15 mins.)