<Research>G Sachs Maintains Cautiously Optimistic View on CN Banks, Prefers CM BANK (03968.HK)The A- and H-shares of Chinese banks rated by Goldman Sachs recorded weighted absolute returns of 12%/ 21% respectively YTD, Goldman Sachs published a research report saying.
The broker believed that this is not driven by investors seeking dividend returns, but rather by improvements in the fundamentals of various banks, including
stabilization of asset quality and narrowing of net interest margin decline.Looking ahead to 3Q25 results, Goldman Sachs maintained a cautiously optimistic view on China's banking sector.
In terms of stock selection, Goldman Sachs will focus on banks that can reduce the impact of bond investments on earnings and capital fluctuations during the net interest margin recovery process, appropriately maintain credit growth and uphold provisions and capital adequacy.
Goldman Sachs believed that large state-owned banks and CM BANK (03968.HK) are more capable of achieving sustainable net interest margin recovery compared to their peers, thus offering greater shareholder return potential.
The broker slightly adjusted its 2025-2027 PPOP/ net profit forecasts for banks it rated, reflecting improved prospects for
fee income growth, weakened credit demand, decreased contribution from investment income and higher provisions, etc..
Related News: Citi Expects CN Banks to Outpace Mkt in 4Q; Top Picks ICBC/ CCB/ BANK OF CHINA
Goldman Sachs lowered its target prices for covered Chinese banks' H-shares by 1-9%. Of which, the broker preferred CM BANK, with rating at Buy, and cut its target price from $53.34 to $52.98.
Goldman Sachs also rated the H-shares of CM BANK, PSBC (01658.HK), BANK OF CHINA (03988.HK) and CCB (00939.HK) at Buy.
Source: AASTOCKS Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
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