Bank of America: Lowered target price for Bank of Communications AH shares, lowered profit forecast for 2026 by 1%

Bank of America Securities released a research report stating that last year, the net profit of Bank of Communications increased by 2.2% year-on-year to 95.6 billion yuan, which was 0.6% lower than expected; pre-provision profit increased by 1.6% year-on-year, which was 0.4% higher than expected; return on equity decreased by 0.7 percentage points year-on-year to 8.4%. The dividend payout ratio decreased to 32.3% year-on-year, with a dividend of 0.325 yuan per share for the whole year, a 14.3% decrease from the previous year, due to the dilution effect of additional capitalization. However, the dividend yield is still stable, with H-shares of Bank of Communications at 5.3% and A-shares at 4.7%. The bank lowered its earnings forecast for Bank of Communications in 2026 by 1%, maintained a "neutral" rating for H-shares with a target price lowered from 7.09 Hong Kong dollars to 6.75 Hong Kong dollars; a "buy" rating for A-shares with a target price lowered from 8.2 yuan to 7.54 yuan.