CMB: "Buy" rating on Industrial and Commercial Bank of China (01398.HK) Target price of HK$7.9

According to the financial news app Securities Times, J.P. Morgan released a research report stating that Industrial and Commercial Bank of China (01398.HK) saw an 8% increase in revenue and a 3% increase in profit in the first quarter, exceeding the bank's expected 5% and 1% respectively. This was mainly driven by a significant rebound in net interest margin and strong growth in non-interest income. Despite stable asset quality, provisions exceeded the bank's expectations by 17% during the period, and credit costs increased year-on-year and quarter-on-quarter. In addition, due to the increase in risk-weighted assets (RWA) density, the core Tier 1 capital adequacy ratio (CET1) continued to decline. The bank expects a slightly positive market response, but capital levels and provisioning trends may limit upside potential for stock prices. The target price is set at 7.9 Hong Kong dollars with a "hold" rating.