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<Research>Citi Recommends CCB/ ICBC/ MINSHENG BANK/ BANK OF BJ; Downside Room for CN Banks Limited
Recommend 46 Positive 57 Negative 28 |
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Despite fundamental pressures, Chinese banks have outpaced the CSI 300 Index and HSI by 65 and 59 ppts respectively since January 2022 as investors' preferences toward dividend yield investments in a deflationary environment have driven inflows from insurers and households, according to a report from Citi. Besides, the "Chinese national team" has purchased bank stocks with high index weights to fortify market confidence, while regulators have introduced a series of policies in favor of the capital market in order to attract household investment into the A-share market and create a wealth effect. In Citi's opinion, the downside for Chinese banks is limited even though their 2Q25 results may be lackluster. The broker based its view on the fact that any stock price correction may lead to higher dividend yields, which will in turn prompt investors to reconsider/ bottom fish Chinese bank stocks. Citi's top picks among Chinese banks included CCB (00939.HK) and ICBC (01398.HK) for their high dividend yields, MINSHENG BANK (01988.HK) for its potential performance rebound and the news of buying capital inflows from China Great Wall Asset Management, and BANK OF BJ (601169.SH) for its underperformance this year, low valuation, high dividend yield, and low holding weight. AAStocks Financial News |
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