JPMorgan: China's August credit data missed expectations; top picks are Bank of China (03988) and China Construction Bank Corporation (00939)

JPMorgan released a research report stating that China's August credit data came in below expectations. The mainland's August aggregate social financing increment was RMB 1.66 trillion, lower than the bank's forecast of RMB 2.27 trillion and the market expectation of RMB 2.12 trillion; new RMB loans were only RMB 60 billion, also significantly below expectations. Within loans, retail borrowing contracted further by 0.2% month-on-month, while corporate medium- to long-term loans and discounted bills remained resilient. JPMorgan stated that against the backdrop of stronger corporate activity, it prefers state-owned banks with stronger corporate finance business advantages. Its top sector picks are Bank Of China (03988) and China Construction Bank Corporation (00939), both rated "Overweight," with target prices of HKD 6.7 and HKD 11.05, respectively.