HSBC Global Research issued a report noting that out of the 10 Chinese banks under its coverage, 8 achieved positive YoY growth in EPS in 3Q24 as boosted by higher trading income and reduced credit costs, reflecting substantial improvement compared to 1H24. The broker highlighted ICBC (01398.HK)  +0.090 (+1.931%)    Short selling $289.14M; Ratio 18.799%   's outperformance against its peers in terms of NIM and cost efficiency in 3Q.

The broker also noted that the credit costs of Chinese banks in 3Q24 were generally stable and within expectations, yet most banks saw a QoQ rise in NPLs. Among them, CM BANK (03968.HK)  +0.200 (+0.526%)    Short selling $82.06M; Ratio 12.432%   and CITIC BANK (00998.HK)  +0.080 (+1.649%)    Short selling $4.65M; Ratio 4.126%   had better control over NPLs, while BANK OF CHINA (03988.HK)  +0.070 (+1.897%)    Short selling $235.63M; Ratio 26.610%   and PSBC (01658.HK)  +0.050 (+1.119%)    Short selling $81.97M; Ratio 28.193%   logged the fastest increase in NPLs.

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In addition, the broker believed that investors would be more concerned about the upcoming capital injections and the potential "adding risk" mentality, which may drive the transfer of time deposits into the investment asset management scale. The broker preferred large state-owned banks for dividends, as well as CM BANK's A- and H-shares and CITIC BANK's H-shares due to their higher exposure to wealth-related income compared to their peers.

Among Chinese banks, the broker was bullish on ICBC, CCB (00939.HK)  +0.130 (+2.156%)    Short selling $771.10M; Ratio 21.903%   , CM BANK, and CITIC BANK, all rated as Buy. Detailed Investment ratings and TPs are listed in a separate table.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-11-01 16:25.)