AGRICULTURAL BANK OF CHINA(SH:601288) Jing Ji Guan Cha Wang·2025-10-21 12:56Core Viewpoint - Agricultural Bank of China (ABC) has overtaken Industrial and Commercial Bank of China (ICBC) to become the largest bank by market capitalization in A-shares, with a market value of 2.76 trillion yuan as of October 21, 2025, driven by a significant increase in its stock price and strong performance compared to peers [1][2]. Group 1: Stock Performance - ABC's stock price has risen for 13 consecutive trading days since September 25, 2025, with a cumulative increase of over 20%, significantly outperforming the broader market [1]. - Year-to-date, ABC's stock has increased by 54.51%, far exceeding the gains of ICBC (15.58%), China Construction Bank (10.73%), and Bank of China (2.28%) [1]. Group 2: Valuation Metrics - ABC's price-to-book (PB) ratio has surpassed 1 for the first time in seven years, reaching 1.03, making it the only major state-owned bank with a PB ratio above 1 [3]. - In contrast, other major banks have lower PB ratios, with ICBC at 0.73, China Construction Bank at 0.72, Postal Savings Bank at 0.69, Bank of China at 0.66, and Bank of Communications at 0.56 [3]. Group 3: Financial Performance - For the first half of 2025, ABC's revenue and net profit growth rates were 0.35% and 1.80%, respectively, outperforming the negative growth reported by ICBC and China Construction Bank [5]. - ABC's non-performing loan (NPL) ratio stands at 1.28%, lower than that of its peers, indicating better asset quality [6]. Group 4: County-Level Financial Strength - ABC has a strong presence in county-level finance, which has helped mitigate the pressure on its net interest margin, recorded at 1.32% [7]. - The bank's loan growth rate for the first half of 2025 was 9.6%, higher than that of ICBC and China Construction Bank, driven by its focus on county-level lending [8]. Group 5: Deposit Stability and Cost - ABC's county-level deposits reached nearly 14 trillion yuan, accounting for 43.86% of total deposits, benefiting from low deposit costs and high stability [9]. - The bank's personal demand deposits make up 22.86% of total deposits, significantly higher than its peers, contributing to a stronger interest margin [9]. Group 6: Future Outlook - Analysts believe that ABC's focus on county-level finance and its strong asset quality position it well for future growth, especially as market conditions evolve [8][10]. - Factors such as upcoming dividend distributions, stabilizing interest rates, and targeted monetary policy are expected to support the banking sector's valuation recovery [10].