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Industrial And Commercial Bank Of China Ltd Class H 01398

Morningstar Rating
HKD 4.76 0.00 (0.00%)
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Company Report

China Banks Earnings: Deeper Revenue and Net Profit Declines on Lower Loan Pricing and Asset Yields

As expected, China’s state-owned enterprise banks—Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Postal Savings Bank of China—reported a year-on-year revenue decline of 2% on average in the first quarter, versus 0.6% growth in 2023. Though the contraction in net profit appeared weaker than expected when compared with the 2% growth in 2023, we expect revenue headwinds to gradually abate. Banks are on track to meet our full-year net profit growth forecast of 0.5%. We retain our fair value estimates of HKD 5 per H share for ICBC, HKD 6.20 per H share for CCB, HKD 3.50 per H share for ABC, HKD 3.50 per H share for BOC, and HKD 6.50 per H share for PSBC.

Price vs Fair Value

01398 is trading at a 732% premium.
Price
HKD 4.76
Fair Value
HKD 3.00
Uncertainty
Medium
1-Star Price
HKD 1.28
5-Star Price
HKD 1.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

With solid experience in international structured financing, ICBC has one of the strongest presences in the "One Belt, One Road" region, covering 21 countries in this region.

Bears

Along with other banks, ICBC faces mounting downward pressure in net interest margin due to credit easing policies in response to the COVID-19 outbreak.

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News

Trading Information

Previous Close Price
HKD 4.76
Day Range
HKD 4.754.80
52-Week Range
HKD 3.354.80
Bid/Ask
HKD 4.76 / HKD 4.77
Market Cap
HKD 1.70 Tril
Volume/Avg
242.2 Mil / 277.9 Mil

Key Statistics

Price/Earnings (Normalized)
4.46
Price/Sales
1.95
Dividend Yield (Trailing)
6.92%
Dividend Yield (Forward)
6.98%
Total Yield
6.92%

Company Profile

ICBC is headquartered in Beijing and founded in 1984, the bank listed its shares in mainland China and Hong Kong in 2006. It is China's largest by asset scale and by share of lending and deposits. Central Huijin Investment (China's sovereign wealth fund manager) and China's Ministry of Finance are ICBC's two largest shareholders, each with a stake of around 35%. ICBC operates over 16,000 outlets. Among these outlets, 417 outlets are located in 42 countries and regions overseas. Corporate banking, retail banking, and wholesale banking accounted for 44%, 44%, and 12% of total revenue, respectively; and 39%, 47%, and 24% of profit before tax in 2022. Overseas banking and other business contributed 8% of total revenue and 6% of profit before tax in 2022.
Sector
Financial Services
Industry
Banks - Diversified
Stock Style Box
Large Value
Total Number of Employees
419,252

Competitors

Valuation

Metric
01398
600036
600016
Price/Earnings (Normalized)
4.466.434.99
Price/Book Value
0.440.940.32
Price/Sales
1.952.851.44
Price/Cash Flow
7.602.56
Price/Earnings
01398
600036
600016

Financial Strength

Metric
01398
600036
600016
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
01398
600036
600016
Return on Assets (Normalized)
1.10%1.33%0.46%
Return on Equity (Normalized)
14.64%16.13%6.61%
Return on Invested Capital (Normalized)
Return on Assets
01398
600036
600016
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Banks - Diversified Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
JPM
JPMorgan Chase & CoFbvmgpftlKnv$573.0 Bil
BAC
Bank of America CorpVjcdmfvbXtf$310.1 Bil
WFC
Wells Fargo & CoNxwsyjshPsw$212.9 Bil
HSBC
HSBC Holdings PLC ADRQfgrxwqbVnlk$166.1 Bil
RY
Royal Bank of CanadaFyyfynzvhMgmd$151.0 Bil
C
Citigroup IncXdhzlzpXpcn$123.5 Bil
MUFG
Mitsubishi UFJ Financial Group Inc ADRBtrwlxlNltcx$116.4 Bil
TD
The Toronto-Dominion BankBknrkywgnXbftn$100.7 Bil
UBS
UBS Group AGKnrfcycvfzQpyrsw$97.4 Bil
SAN
Banco Santander SA ADRVkqbqFkzbppn$81.9 Bil

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