Industrial and Commercial Bank of China - H (1398.HK): Moving to an OW Rating and a HK$8.70 Price Target from Not Rated

Following a period of restriction, J.P. Morgan moves to an Overweight rating on Industrial and Commercial Bank of China - H (1398.HK) with a December 2027 price target of HK$8.70 (prior OW rating and Dec-2027 PT of HK$8.40 before the restriction) from a Not Rated designation. The stock trades at HK$7.60. The team forecasts profit growth of 3.9%/4.3%/4.5% in 2026-28E, with adjusted EPS rising from Rmb1.03 in FY25A to Rmb1.17 in FY28E and DPS from Rmb0.31 to Rmb0.36; NIM holds at about 1.3%, NPL ratio edges down to 1.2%, coverage is around 210%, CET1 slips from 13.6% to 12.9% and dividend yield rises from 4.8% to 5.6%. The investment case rests on four pillars: the past decade shows ICBC has offered lower EPS and DPS volatility than the sector average; ICBC has demonstrated lower downside risk to tariff wars versus peers; it should see lower dilution risk than SOE peers in the event of a capital injection;