UBS upgraded MINSHENG BANK from Neutral to Buy due to its deep discount valuation, with a projected 2026 price-to-book (PB) ratio of only 0.22x, which is significantly lower than CITIC BANK's 0.47x. The upgrade is also supported by expectations of revenue improvement and a substantial release of balance sheet risk, with earnings anticipated to reach a turning point starting in 2026. UBS forecasts that earnings will break even in 2026 and turn to positive growth in 2027, suggesting potential for a valuation re-rating that could offset recent weaknesses in return on equity. Additionally, UBS raised its EPS forecasts for 2026-2029 by 5-6%, despite slightly increasing the cost of equity to 11.5% due to short-term market volatility.
