reports
- Kenny Yong Hui Lim
- Tham Mun Hon
China Strategy: Providing greater countercyclical support.
On 12 Oct 24, the MOF updated its countercyclical supportive policies and structural reforms to achieve high quality growth. The key positives are initiatives to resolve local government debt and substantially increase the debt limit. Finer details of the policies are lacking due to pending approval by the Standing Committee of the NPC. Overall, these are positive but we downgrade the banking sector to MARKET WEIGHT due to the potential EPS and ROE dilution on SOE banks from the capital injectio...
0939 CHINA CONSTRUCTION BANK CORPORATION CLASS H
1398 INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED CLASS H
01288 AGRICULTURAL BANK OF CHINA LIMITED CLASS H
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
01658 POSTAL SAVINGS BANK OF CHINA CO. LTD. CLASS H
3988 BANK OF CHINA LTD
INDL.& CMLBK.OF CLTD. loses on its star level and is downgraded to Sli...
The independent financial analyst theScreener just slightly lowered the general evaluation of INDL.& CMLBK.OF CLTD. (HK), active in the Money Center Banks industry. The title has lost a star(s) at the fundamental level and now shows 3 out of 4 stars. Its exposure to market risk remains nonetheless the same and can be still described as defensive. theScreener slightly downgrades the general evaluation to Slightly Positive for the title on account of the lost star(s). As of the analysis date March...
- Iris Tan
Morningstar | Chinese Banks Involved in Investigation on North Korea S...
On Tuesday, the media reported that Shanghai Pudong Development Bank, along with China Merchants Bank, or CMB, and Bank of Communications, or BOCOM, were found in contempt for refusing to comply with subpoenas in a North Korea sanctions violation investigation conducted by a U.S. judge. The H-Shares of CMB and BOCOM declined by 7.7% and 3.7%, respectively, though both companies officially denied involvement in any investigations related to possible violations of sanctions, and are in compliance ...
- Iris Tan
Chinese Banks Involved in Investigation on North Korea Sanctions, We R...
On Tuesday, the media reported that Shanghai Pudong Development Bank, along with China Merchants Bank, or CMB, and Bank of Communications, or BOCOM, were found in contempt for refusing to comply with subpoenas in a North Korea sanctions violation investigation conducted by a U.S. judge. The H-Shares of CMB and BOCOM declined by 7.7% and 3.7%, respectively, though both companies officially denied involvement in any investigations related to possible violations of sanctions, and are in compliance ...
- Iris Tan
Morningstar | ICBC's First Quarter Recorded Stronger-Than-Peer Top-Lin...
Industrial and Commercial Bank of China, or ICBC, is China's largest bank. We think its leading scale efficiency and funding advantages endow it with a narrow economic moat.ICBC has a long-established reputation for mass-market retail banking and enjoys low funding costs in the industry. Its established relationships with households, unmatched convenience via more than 16,000 domestic outlets, and brand backed by government credit combine to reward it with the largest retail deposit base, repres...
- Iris Tan
ICBC's First Quarter Recorded Stronger-Than-Peer Top-Line Growth
Despite Industrial and Commercial Bank of China's solid results, we retain our CNY 6.50 per share fair value estimate for the China A-shares, and HKD 7.50 for H-shares as results were largely in line. Net profit increased 4.1% from 2017. The results stood out with a better-than-peer performance in net interest margin and strong improvement in operating efficiency. Boosted by the 19% revenue growth and a 304 basis point improvement in cost/income ratio, growth in preprovision operating profits ac...
- Iris Tan
Morningstar | ICBC’s 1Q Recorded Stronger-than-Peer Top Line Growth ...
Despite Industrial and Commercial Bank of China's solid results, we retain our CNY 6.50 per share fair value estimate for the China A-shares, and HKD 7.50 for H-shares as results were largely in line. Net profit increased 4.1% from 2017. The results stood out with a better-than-peer performance in net interest margin and strong improvement in operating efficiency. Boosted by the 19% revenue growth and a 304 basis point improvement in cost/income ratio, growth in preprovision operating profits ac...
- Iris Tan
ICBC’s 1Q Recorded Stronger-than-Peer Top Line Growth and Operating ...
Despite Industrial and Commercial Bank of China's solid results, we retain our CNY 6.50 per share fair value estimate for the China A-shares, and HKD 7.50 for H-shares as results were largely in line. Net profit increased 4.1% from 2017. The results stood out with a better-than-peer performance in net interest margin and strong improvement in operating efficiency. Boosted by the 19% revenue growth and a 304 basis point improvement in cost/income ratio, growth in preprovision operating profits ac...
- Iris Tan
Morningstar | ICBC Saw Strong Improvement in Credit Quality, Deposit C...
Industrial and Commercial Bank of China, or ICBC, is China's largest bank. We think its leading scale efficiency and funding advantages endow it with a narrow economic moat.ICBC has a long-established reputation for mass-market retail banking and enjoys low funding costs in the industry. Its established relationships with households, unmatched convenience via more than 16,000 domestic outlets, and brand backed by government credit combine to reward it with the largest retail deposit base, repres...
- Iris Tan
ICBC Saw Strong Improvement in Credit Quality, Deposit Costs Advantage...
Following Industrial and Commercial Bank of China's solid results including net profit increasing 4.1% from 2017, we retain our CNY 6.50 per share fair value estimate for the A-shares, and HKD 7.50 for H-shares as results were largely in line. Net profit growth came in slightly below our 5% expectation as a result of increased provision expenses, while growth in preoperating provision profits, or PPOP, remained steady at 9%. In our view, such high growth indicated ICBC’s strong top line growth...
- Iris Tan
Morningstar | ICBC Saw Strong Improvement in Credit Quality, Deposit C...
Following Industrial and Commercial Bank of China's solid results including net profit increasing 4.1% from 2017, we retain our CNY 6.50 per share fair value estimate for the A-shares, and HKD 7.50 for H-shares as results were largely in line. Net profit growth came in slightly below our 5% expectation as a result of increased provision expenses, while growth in preoperating provision profits, or PPOP, remained steady at 9%. In our view, such high growth indicated ICBC’s strong top line growth...
- Iris Tan
ICBC Saw Strong Improvement in Credit Quality, Deposit Costs Advantage...
Following Industrial and Commercial Bank of China's solid results including net profit increasing 4.1% from 2017, we retain our CNY 6.50 per share fair value estimate for the A-shares, and HKD 7.50 for H-shares as results were largely in line. Net profit growth came in slightly below our 5% expectation as a result of increased provision expenses, while growth in preoperating provision profits, or PPOP, remained steady at 9%. In our view, such high growth indicated ICBC’s strong top line growth...
- Iris Tan
Morningstar | 01398 Updated Forecasts and Estimates from 19 Feb 2019
Following the People's Bank of China's announcement that it will launch central bank bill swaps to improve the liquidity of banks' perpetual bonds, we’re maintaining our fair value estimates for the Chinese banks we cover. According to the central bank’s statement, primary dealers engaged in an open-market operation are allowed to swap the perpetual bonds they hold for the central bank bills. Banks' perpetual bonds with ratings no lower than AA will be included as qualified collateral for a ...
- Iris Tan
PBOC Launches Swaps to Improve Liquidity of Banks' Perpetual Bonds; Ne...
Following the People's Bank of China's announcement that it will launch central bank bill swaps to improve the liquidity of banks' perpetual bonds, we’re maintaining our fair value estimates for the Chinese banks we cover. According to the central bank’s statement, primary dealers engaged in an open-market operation are allowed to swap the perpetual bonds they hold for the central bank bills. Banks' perpetual bonds with ratings no lower than AA will be included as qualified collateral for a ...
- Iris Tan
Morningstar | China's Latest RRR Cut Comes as Expected and Has Limited...
We see China’s latest cut in its reserve requirement ratio as having limited impact on the valuations of the Chinese banks we cover. We believe the benefits of liquidity injection are largely offset by downward pressure on net interest margin, given weaker loan pricing and intense deposit competition. Our top picks are Agricultural Bank of China and Industrial & Commercial Bank of China, which are trading at 29% and 26% discounts to our fair value estimates, respectively. Assuming other assum...
- Iris Tan
China's Latest RRR Cut Comes as Expected and Has Limited Impact on Chi...
We see China’s latest cut in its reserve requirement ratio as having limited impact on the valuations of the Chinese banks we cover. We believe the benefits of liquidity injection are largely offset by downward pressure on net interest margin, given weaker loan pricing and intense deposit competition. Our top picks are Agricultural Bank of China and Industrial & Commercial Bank of China, which are trading at 29% and 26% discounts to our fair value estimates, respectively. Assuming other assu....
- Iris Tan
Morningstar | Industrial and Commercial Bank of China Saw Accelerated ...
With growth in revenue and net profit accelerating to 7.7% and 5.1%, respectively, from the year-ago period, narrow-moat Industrial and Commercial Bank of China delivered another set of strong results in the first three quarters. Given the results representing 80% of our projected full-year net profit, the bank is well on track to deliver our forecast 5.8% net profit growth in 2018. The results highlighted its faster-than-peer deposit growth, steady credit quality, and improving operating effici...
- Iris Tan
Industrial and Commercial Bank of China Saw Accelerated Growth in Thir...
With growth in revenue and net profit accelerating to 7.7% and 5.1%, respectively, from the year-ago period, narrow-moat Industrial and Commercial Bank of China delivered another set of strong results in the first three quarters. Given the results representing 80% of our projected full-year net profit, the bank is well on track to deliver our forecast 5.8% net profit growth in 2018. The results highlighted its faster-than-peer deposit growth, steady credit quality, and improving operating effici...
- Iris Tan
Morningstar | People's Bank of China Introduces Required Reserve Ratio...
On Oct. 7, People's Bank of China announced a 1-percentage-point reduction in the Chinese central bank’s required reserve ratio effective Oct. 15. This is the third RRR cut in 2018 following the 100- and 50-basis-point cuts announced in April and June. We retain our fair value estimates for the Chinese banks as we believe the benefits of liquidity injection are largely offset by weaker loan pricing and higher credit costs as the economy is facing mounting challenges both domestically and exter...
- Iris Tan
People's Bank of China Introduces Required Reserve Ratio Cut Effective...
On Oct. 7, People's Bank of China announced a 1-percentage-point reduction in the Chinese central bank’s required reserve ratio effective Oct. 15. This is the third RRR cut in 2018 following the 100- and 50-basis-point cuts announced in April and June. We retain our fair value estimates for the Chinese banks as we believe the benefits of liquidity injection are largely offset by weaker loan pricing and higher credit costs as the economy is facing mounting challenges both domestically and exter...
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