ICBC-Buy:In-line results

2015-08-27 来源:香港上海汇丰银行有限公司 字号: 12 14
     1H15 NPAT was RMB149bn, up 0.7% y-o-y, with 2Q15 flat y-o-y vs. 1Q15’s +1% y-oy.
    1H15 comprised 54% of our FY15E NPAT (1H14 was 54% of FY14 NPAT).
    What we liked: (i) Net fee income growth of 12% y-o-y was stronger than 1Q15’s -1% yo-y. 1H15’s net fees rose 5% y-o-y, driven by personal wealth management and privatebanking services, up 88% y-o-y (benefiting from strong 1H15 capital markets) andcomprising 22% of fee income. Growth of corporate wealth management fees was solid at+31% y-o-y. While capital markets have weakened recently, ICBC no longer faces a largedrag on fee growth from a high base effect caused by tougher fee regulations introducedin Aug. 2014; (ii) Cost to income ratio fell 2ppt y-o-y in 2Q15 to 31% and 1ppt y-o-y in1H15 to 30%; (iii) Risk weighted assets to total assets ratio fell 3.2ppt h-o-h to 57.4%; (iv)A strong sector-leading Tier 1 ratio of 12.4%, up 21bp h-o-h, but down 11bp q-o-q due tothe payment of 2014’s final dividend.
    What we disliked: (i) Net interest margins (NIM) fell 14bp q-o-q to 2.46% in 2Q, morethan 1Q15’s 12bp q-o-q fall; (ii) While credit costs was flat q-o-q at 74bp, this seemed tobe at the expense of the provisioning coverage ratio, which fell 17ppt q-o-q to 163% andthe loan-loss-reserve (LLR) ratio, which fell 3bp q-o-q to 2.29%.
    Other points of interest: (i) the NPL ratio rose 12bp q-o-q to 1.40% in 2Q15, less than1Q15’s 16bp q-o-q; the h-o-h rise was thus 28bp. The h-o-h rise was driven by theWestern region (+44bp), Yangtze River Delta (+39bp) and Bohai Rim (+27bp). Addingback writeoffs, the adjusted NPL ratio was 1.67%, up 54bp h-o-h (2H14’s equivalent risewas 37bp h-o-h). The overdue loan ratio was up 57bp h-o-h, while the special mentionloan ratio was up 71bp h-o-h to 3.61%; (ii) Both loans and deposits were up 3% q-o-q; (ii)The demand deposit mix of total deposits was 47% in 2Q15, flat h-o-h.
    Buy rating on ICBC-H with lower TP of HKD9.50 (cut 3% from HKD9.80 on a lowerCNYHKD FX assumption); Maintain Buy with TP of RMB7.90 on ICBC-A: We use adiscounted Gordon Growth model to value ICBC. See pg. 2 for valuation & risks.