HK/CH banks: China banks’ risk-off rotation rally may fade; STAN pullback a chance to add

Research evidence excerpt

HK/CH banks: China banks’ risk-off rotation rally may fade; STAN pullback a chance to add

Asia Pacific Equity Research

08 July 2026

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HK/CH banks

China banks’ risk-off rotation rally may fade; STAN

pullback a chance to add

Renewed Middle East conflict concerns and profit-taking in the AI trade appear to Banks & Financial Services

be driving a risk-off rotation into perceived safe-haven China SOE banks, while AC Katherine Lei

weighing on higher-beta names such as STAN. Looking ahead, we expect today’s (852) 2800-8552

(July 8) sharp rally in China banks to moderate and anticipate sideways trading katherine.lei@jpmorgan.com

into the late-August results season. Within SOE banks, we prefer CCB and BOC; J.P. Morgan Securities (Asia Pacific) Limited/

over a six-month horizon, we favor CMB-A and Citic Bank-H for their higher J.P. Morgan Broking (Hong Kong) Limited

dividend yields (CMB-A: 5.5%, Citic-H: 6.4%). For STAN, despite potential Peter Zhang

2Q26 earnings growth headwinds from a high base—reflecting the prior-period (852) 2800-8557

disposal gain and elevated episodic income—we view any pullback into results peter.zhang@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/

and risk-off trade as an opportunity to accumulate. We believe Middle East J.P. Morgan Broking (Hong Kong) Limited

exposure risks are manageable, and STAN remains on track to lift ROTE from Lincoln Yu

11.9% in 2025 toward management’s guidance of >15% by 2028 and 18% by (852) 2800 8523

2030.