Bank of America Securities: Upgrades Bank of Communications rating to "Neutral" and raises target price to HKD 6.55
Bank of America Securities released a research report stating that it has raised its profit forecast for Bank of Communications for 2025 to 2027 by 1% to 4%. The target price for H shares has been increased from HKD 6.3 to HKD 6.55, and the H share rating has been upgraded from underperform to neutral. The target price for A shares has been raised from RMB 7.58 to RMB 7.91, with the rating upgraded from "neutral" to "buy." Bank of Communications' performance last quarter was solid, with a yield of 4.6%, the highest among state-owned banks. In the first three quarters, the bank's net profit grew by 1.9% year-on-year to RMB 70 billion, with the growth rate accelerating by 1.6% compared to the first half of the year. Core earnings increased by 0.9% year-on-year, reversing a 1% decline in the first half. The annualized ROE for the first three quarters decreased by 0.7 percentage points year-on-year to 8.2%. The core Tier 1 capital adequacy ratio slightly declined by 5 basis points quarter-on-quarter to 11.37%. The report mentioned that Bank of Communications' stock price has significantly underperformed its peers over the past six months, partly due to dilution effects. With the weak stock price performance, its dividend yield has become more attractive, and the third-quarter results indicate a stable operational trend
