Glonghui, January 9 | J.P. Morgan Chase released a report last week stating that domestic bank stocks are gradually turning more positive, based on risk mitigation in the end of the mainland banking system, driven by small banking reforms and local government debt relief plans, and lower deposit interest rates, which have led to potentially more stable net interest spreads and return on equity. Based on concerns about macroeconomic recovery and bank profit risks, the bank continued to prefer state-owned banks in the first half of this year, and state-owned banks have more stable profits and dividend payout growth per share, and large banks will likely benefit from the new capital regulations that came into effect in January this year, resulting in lower dividend ratio risk compared to joint-stock commercial banks. The bank also stated that the dividend rates for A-shares and H-shares of state-owned banks were 6.4% and 9.2%, respectively. The bank uses CCB AH shares as the industry's first choice. Both have an investment rating of “increase in holdings”, with target prices of RMB 8 and HK$6.05 respectively. Furthermore, the bank gave ICBC, Bank of China and Postbank “additional” ratings. The target price was HK$4.6/3.2/4.35, and the Bank of China had “neutral” ratings. The target price was HK$5.2/3.2, respectively.