Bank of America Securities: Raised Bank of Communications (03328) target price to HK$7.1 to maintain “neutral” rating

The Zhitong Finance App learned that Bank of America Securities released a research report saying that Bank of Communications (03328) maintained a “neutral” rating due to a lower dividend yield than its state-owned bank peers, and the target price was raised from HK$6.96 to HK$7.1; the dividend rate for A shares (601328.SH) reached 4.8%, higher than the average of 4% of the state-owned industry average. The valuation attracted and reaffirmed the “buy” rating for A shares. The target price was raised from RMB 7.76 to RMB 7.92. The bank pointed out that the return on shareholders' equity (ROE) for the first half of the year fell 0.5 percentage points to 8% year-on-year, and the core Tier 1 capital adequacy ratio remained flat at 11.25% quarterly. The interim dividend was RMB 0.168 per share, up 7.7% year-on-year, and the dividend ratio increased by 1 percentage point year-on-year.

Net profit for the first half of this year rose 4% year on year to 47.9 billion yuan (same below), slightly lower than the bank's forecast of 0.4%, and operating profit before provision (PPOP) rose 10.8% year on year to 88.6 billion yuan, 1.3% higher than the bank's forecast. Due to the low base effect, income tax soared tenfold year-on-year in the first half of the year, and the actual tax rate reached 9.4%. The bank fine-tuned the 2026-2028 earnings forecast per share in response to performance, with a margin of less than 1%. Bank of America believes that