ICBC 1398

[winston]

not vested

Latest Views, Ratings, TPs on ICBC (01398.HK) Post QoQ Results (Table)

Brokers│Ratings│TPs (HK$)
UBS│Buy│6.5
Morgan Stanley│Overweight│6.4
Nomura│Buy│6.38
Credit Suisse│Outperform│6.6->6.3
JPMorgan│Neutral│6.2

Brokers│Views
UBS│1Q result behind forecast, yet growth may speed up starting 2Q
Morgan Stanley│asset quality solid; profit growth affected by fee income
Nomura│credit cost stabilizes further; asset quality stays solid
Credit Suisse│trims 2020-22E earnings on weak rev growth
JPMorgan│1Q NP growth weakest among big 4 state-owned commercial banks

Source: AAStocks Financial News

[winston]

vested

Valuation

We slightly lowered our FY19/20F earnings forecasts by 2% due to a lower NII amid loan yield pricing down, but we rolled over TPs to FY20 and raised H-share/A-share to HK$6.97/6.48 from HK$6.61/Rmb6.14 which are based on DDM methodology, where we assume 12.6% cost of equity, 10% ROE and 4% terminal growth.

Our target price implies 0.8x FY20F P/BV.

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... 398_HK.xml

[winston]

Industrial and Commercial Bank of China (1398 HK / 601398 CH)

Recommendation : BUY
Fair Value : HKD 5.50 (1398 HK) / CNY 6.60 (601398 CH)

A MIXED BAG . s

Soft underlying revenue trend
Asset quality remains stable
Relatively attractive dividend yield

Summary (1398 HK): ICBC posted a mixed set of results with earnings came in-line but underlying revenue trend weaker than its peers.

With a stable asset quality and a relatively high NPL coverage of 218% in 2Q24, we believe ICBC should have capacity to release provisions built up over the past few years to smooth earnings growth.

Total return (dividend and share price appreciation) of ICBC has amounted to 11.2% since May (after the real estate policy combo was announced in late-April).

ICBC is trading at 0.35x forward price-to-book (P/B), which is close to -1s.d. to historical average. The stock is offering a relatively high dividend yield of 7.9% and 8.0% in 2024 and 2025 respectively and is likely to attract fund inflows.

Our fair value estimate is HKD5.50 which is set at 0.55x forward P/B, implying -0.25 s.d. to its historical average

Source: OCBC

[winston]

not vested

Investor confidence buoyed by new policies

A series of policy measures have eased investors’ concerns over macroeconomic uncertainties and property-related exposures, in our view.

We see this reducing downside risks relating to asset quality, which we believe could therefore be positive for bank valuations.

We cut our FY24-26F EPS by 1.3-4.8%, primarily to factor in lower forecasts for non-interest income in FY24F and PPOP growth over FY25-26F.

Reiterate our Add rating with a higher TP of HK$6.80, driven by reduced concerns over policy risks, partly offset by lower sustainable ROE.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 0660C6081C

[winston]

not vested

ICBC ADD, TP HK$7.20, HK$5.66 close

We see Industrial Bank of China’s (ICBC) FY25F P/E of 5.2x (one of the lowest among the big four banks, after CCB) and its FY25F dividend yield of 6.1%, the highest among the big four banks, as attractive to Southbound investors.

Source: CGS