JPMorgan: Overweight rating on Industrial and Commercial Bank of China (01398), target price HK$8.7

JPMorgan released a research report stating that it has adjusted its rating on Industrial and Commercial Bank of China (01398) from "Not Rated" to "Overweight" and assigned a target price of HK$8.7. The bank forecasts that Industrial and Commercial Bank of China's earnings will grow by 3.9%, 4.3%, and 4.5% in 2026, 2027, and 2028, respectively. JPMorgan stated that the record over the past decade shows that Industrial and Commercial Bank of China's earnings per share and dividend volatility are lower than the industry average. Compared with peers, Industrial and Commercial Bank of China faces lower downside risk from the tariff war, and if capital injection occurs, its equity dilution risk is also lower than that of peers. The bank believes that in the medium term, dividends are the main factor supporting Industrial and Commercial Bank of China's performance. Industrial and Commercial Bank of China can offset potential negative factors such as additional asymmetric rate cuts, mortgage refinancing at lower rates, or a rise in the non-performing loan formation rate by releasing provisions, so the downside for dividend payouts is limited.