ICBC(601398) 海通证券·2024-11-08 12:48Investment Rating - The report maintains an "Outperform" rating for Industrial and Commercial Bank of China (ICBC) [1][4] Core Views - ICBC's Q3 2024 revenue and net profit growth turned positive, with revenue up 1.1% YoY and net profit attributable to shareholders up 3.8% YoY [4] - Asset quality remained stable, with a non-performing loan (NPL) ratio of 1.35%, flat QoQ [4] - Net interest margin (NIM) stabilized at 1.39% for the first three quarters of 2024, with Q3 NIM increasing by 8bps to 1.41% [4] - Corporate loans continued to drive growth, with corporate loan balance up 9.51% YoY, while personal loans grew 2.61% YoY [4] Financial Performance - ICBC's core tier-1 capital adequacy ratio increased by 0.56 percentage points YoY to 13.95% [4] - Provision coverage ratio decreased by 2.4 percentage points to 216.2%, while annualized credit cost declined by 0.07 percentage points to 0.63% [4] - For 2024-2026, the report forecasts EPS of 0.97, 0.99, and 1.02 yuan, with net profit growth rates of -0.50%, 1.50%, and 2.76% respectively [5] Valuation - The DDM model suggests a fair value of 7.1 yuan, while the PB-ROE model indicates a fair value of 6.84 yuan, resulting in a valuation range of 6.84-7.1 yuan [5] - The 2024E PB multiple is 0.67x, higher than the peer average of 0.61x [5][7] Market Performance - ICBC's stock price ranged between 4.65-6.66 yuan over the past 52 weeks, with a closing price of 6.15 yuan on November 7, 2024 [1] - ICBC underperformed the CSI 300 index over the past 3 months, with an absolute return of 5.7% compared to the index's 18.4% [3] Peer Comparison - ICBC's 2024E PB multiple of 0.67x is higher than peers such as Agricultural Bank of China (0.70x), China Construction Bank (0.63x), and Bank of China (0.65x) [7] - The bank's 2024E PE multiple of 7.02-7.29x is also higher than the peer average of 6.14x [5][7] Financial Projections - Revenue is expected to grow from 815.006 billion yuan in 2024E to 858.555 billion yuan in 2026E, with YoY growth rates of -3.33%, 1.77%, and 3.51% respectively [6] - Net profit is projected to increase from 362.167 billion yuan in 2024E to 377.731 billion yuan in 2026E [6] - Average ROE is forecasted to decline from 9.87% in 2024E to 9.05% in 2026E [6]