JPM updated its model for ABC and lowered its earnings forecasts for 2026 to 2028 due to expected narrowing of net interest margin (NIM) caused by a deterioration in the loan portfolio. Despite this, ABC's asset quality is improving, and it has the highest non-performing loan coverage ratio among China's major state-owned banks, providing a buffer for future earnings. However, its capital position is relatively weaker compared to peers. The target price for ABC's H-shares was lowered from HKD7.2 to HKD6.55, while maintaining an Overweight rating.
