2024-10-14 14:30Investment Rating - The investment rating for China CITIC Bank Corporation Limited is Equal-weight with a price target of HK$4.50 [1][2]. Core Insights - The report indicates stable business growth with an improved risk profile and business restructuring for China CITIC Bank [2]. - Earnings forecasts have been revised following the 2Q24 results, with net interest margin (NIM) forecasts adjusted to 1.76% for 2024, 1.74% for 2025, and 1.78% for 2026 [1]. - Loan growth and deposit growth forecasts have been revised down to 3.5%/3.1%/3.1% and 3.6%/3.4%/3.4% for 2024/25/26 respectively, while non-performing loan (NPL) ratio forecasts have been slightly increased to 1.19%/1.21%/1.27% for the same period [1]. - The bank is expected to deliver net profit growth of 1.2% in 2024, 3.3% in 2025, and 7.7% in 2026, with EPS estimates adjusted down by 0.5%/0.8% for 2024/25 and up by 1.8% for 2026 [1]. Summary by Sections Earnings Inputs - Net interest margin is projected at 1.76% for 2024, total asset growth at 2.9%, credit cost at 1.05%, and cost-income ratio at 33.3% [5][6]. Investment Drivers - The report highlights gradual improvement in asset quality and cooperation within the Citic Group as key investment drivers [7]. - The bank's focus on innovative online products and stable business growth are also noted as positive factors [7]. Price Target and Valuation - The price target of HK$4.50 is derived using a dividend discount model (DDM) based on long-term dividend forecasts [2][3]. - The report indicates a consensus price target distribution with a mean target of HK$4.47 and a maximum of HK$7.45 [3].