Morgan Stanley: Optimistic about Agricultural Bank of China (01288) and China Construction Bank Corporation (00939) next year, expecting to provide a dividend yield of about 7%.

Morgan Stanley released a research report stating that before the confirmation of the bottom of the real estate and industrial cycle in the second half of 2025, it is safe to choose state-owned H-shares like Agricultural Bank Of China (01288) and China Construction Bank Corporation (00939) which offer a dividend yield of around 7%, as growth stocks carry risks, and returns on mainland regular deposits and debt are low. The bank also mentioned that Postal Savings Bank Of China (01658) offers a similar dividend yield, as well as more potential for cost savings and reduced funding costs, making it still Morgan Stanley's top choice with a target price of HK$5.3. Agricultural Bank, Construction Bank, Industrial and Commercial Bank of China (01398), Bank Of China (03988), and China Merchants Bank (03968) have target prices of HK$4.4, HK$7.1, HK$5.6, HK$4.6, and HK$44.5 respectively, all rated as "hold".