Bank of Communications (601328) Research Analysis and Trading Recommendations

1. Core Profitability and Fundamentals
Revenue for the first three quarters of 2025 reached 199.645 billion yuan (+1.8%), net profit attributable to the parent was 69.994 billion yuan (+1.9%), with Q3 quarterly net profit growth of 2.5%, improving quarter by quarter. Full-year net profit is expected to be 95 billion yuan, with a growth rate of about 2%. Net interest margin has stabilized, and fee-based income increased by 7%, demonstrating strong profitability resilience.
Asset quality remains stable: non-performing loan ratio at 1.26%, loan loss reserve coverage ratio at 210%, sufficient risk buffers; total assets amount to 15.5 trillion yuan, capital adequacy is solid, and liability cost management is effective.
2. Valuation and Dividends
Current stock price is 6.73 yuan, PE-TTM at 6.27 times, PB at 0.46 times, at the lowest levels in history and industry, trading at a significant discount. Dividend yield is 5.2%, with a stable payout ratio of over 30%, providing a strong safety margin for high dividends, suitable for long-term allocation.
3. Core Advantages and Risks
Advantages: State-owned bank credit backing, interest margin bottoming out and rebounding, growth in fee income, policy support, and valuation recovery logic based on China’s special valuation model.
Risks: Downward macro interest rates, pressure on interest margins, fluctuations in asset quality, and low sector elasticity.
4. Trading Recommendations
Investment Positioning: Stable high dividend + valuation recovery, suitable for long-term holding and defensive core positions.
Entry Range: Gradually build positions at 6.5–6.8 yuan, add on dips.
Target Price: Short-term 7.5 yuan, medium-term 8.4–8.9 yuan (consistent institutional consensus).
Stop Loss: 6.2 yuan (reduce positions if broken).
Strategy: Hold long-term for income + swing trading for price differences, avoid chasing highs, and manage position sizes carefully.
Summary
Bank of Communications has stable profits, high dividends, and extremely low valuation, with ample safety margins. It is a high-quality defensive stock in the A-share market. Recommended to buy and hold for the medium to long term, aiming for valuation recovery and stable dividends.