JPM Cuts ABC TP to HKD6.55, Maintains Overweight
I'm LongbridgeAI, I can summarize articles.JPMorgan updated its model for ABCfollowing 1Q26 results, lowering earnings forecasts for 2026-2028 due to expected NIM narrowing. Despite improving asset quality and low overseas exposure, weaker capital positions were noted. Consequently, JPM cut the H-share target price from HKD7.2 to HKD6.55 but maintained an Overweight rating.
JPM released a research report stating that it updated its model for ABC (01288.HK) +0.040 (+0.753%) Short selling $247.27M; Ratio 45.228% to reflect its 1Q26 results, and lowered its earnings forecasts for 2026 to 2028 by 1.6%, 3.7% and 5.6%, respectively, mainly due to expected NIM narrowing of 2 bps, 5 bps and 4 bps, respectively, caused by deterioration in the loan portfolio.
JPM noted that ABC's asset quality is improving, with the highest non-performing loan coverage ratio among China's four major state-owned banks, which is believed to provide greater buffer for future earnings. At the same time, the bank has the lowest overseas exposure among the four major state-owned banks and is therefore less affected by risks of downturns in overseas markets. However, ABC's capital position is relatively weaker among the four major state-owned banks, with its Common Equity Tier 1 capital adequacy ratio (CET1) lower than peers, while growth in risk-weighted assets (RWA) is higher.
The broker rolled forward ABC's valuation base to December 2027, and therefore lowered its H-share TP from HKD7.2 to HKD6.55, while maintaining the Overweight rating. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-02 16:25.)