The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that it is optimistic about the third quarter performance of large state-owned banks and expects major state-owned banks to continue to outperform the market; the bank downgraded the Postbank (01658) rating from “increase” to “neutral,” and the target price remained unchanged at HK$5.9 in December 2027.
The bank pointed out that the third-quarter revenue growth of major state-owned banks is expected to be driven by a 10% year-on-year increase in net interest income, with net interest spreads being generally stable, and interest-bearing assets growing by a high single digit year over year; handling fee revenue may be weak due to a high base, but the five major banks are expected to benefit from recent IPOs (such as Changxin) to account for some fair value income. In terms of joint stock banks, the revenue and profit trends of China Merchants Bank (03968) and China CITIC Bank (00998) are expected to be relatively stable.
The bank expects the third quarter revenue and profit of the Postbank to increase by 6% and 4% year-on-year, respectively; it only obtained a financial asset investment (AIC) license in 2025, missed investments such as Changxin (688825.SH), etc., and had little room to rise in investment income. In addition, the credit cost base for the third quarter of 2025 was extremely low (only 7 basis points annualized, about 40 basis points compared to the three-year average), so its performance may lag behind major state-owned banks. The stock price of the Postbank has risen by about 13% since the second quarter results, outperforming the MSCI Bank of China Index by about 7 percentage points. Now is a profitable time. We can wait for the quality of retail assets to stabilize or see an inflection point before seeking a better entry point.
The bank updated the China Everbright Bank (06818) model and lowered its 2026-2028 revenue forecast by about 2%, and reduced net profit by about 16%, 18% and 18% respectively. The target price of Everbright Bank (601818.SH) A shares in December 2027 was reduced from RMB 2.70 to RMB 2.30, and the target price of H shares was lowered from HK$2.60 to HK$2.20, and the rating maintained “reduced holdings”. The bank indicates that Everbright's net interest spread trend is relatively stable, but loan growth is weak, non-interest income is weak, revenue momentum is expected to be lower than that of peers, and the quality of retail assets is under pressure or driving up impairment and dragging down profits.