|
中国银行
|
银行和金融服务
|
2014-01-07
|
2.57
|
1.86
|
--
|
2.76
|
7.39% |
|
2.76
|
7.39% |
|
详细
We believe 2014 is going to be volatile for China banks, on both stockperformance and in terms of operating environment. We believe BOC will delivermore stable returns than its peers due to more resilient NIM and lower exposure toareas with high regulatory risks, such as interbank and WMP. BOC is trading at10% to H-share banks and a 20% discount (13E P/B) to ABC, CCB and ICBC, onaverage. We believe this discount will narrow as the market appreciates a stablebank with the highest dividend yield (Table 1) amid a volatile market. We upgradeBOC to OW from a Neutral rating, with our price targets revised up by ~2% toHKD4.35 and RMB3.4 for H/A shares. Our PT implies 2014E P/B of 0.9x. More stable NIM than peers. 18% and 8% of BOC’s average interest earningassets are from overseas or domestic FX operations in 1H13, respectively, thehighest exposure among China banks. We believe that the NIM of these twoareas are likely to be stable or even slightly improve in 2014 and 2015, and thusBOC’s overall NIM is set to be more stable compared to peers, in our view. Key beneficiary of recovering export growth. BOC has higher concentrationin export-related sectors, and is more active in trade finance business. Webelieve a recovery in export growth will be positive for its fee income and assetquality. In addition, a macro recovery in developed markets should be accretiveto the profit growth of BOC's overseas subsidiaries. Concerns on RMB appreciation overplayed: BOC has hedged its net FXposition by using FX swaps, and thus net position has been negative since 2012(Table 12). In the past few years, despite RMB appreciation, BOC hasrecognized net FX gains. And the impact on equity has been immaterial. Upside on capital not being recognized: BOC has outstanding convertiblebonds of RMB39.4bn. We calculate that adjusting for dividend payout, strikeprice at mid 2015 will be RMB2.43, lower than current A-share trading price ofRMB2.56. This will likely encourage a higher debt-to-equity conversion rate. We calculate that full conversion would lift 2015e tier 1 ratio by 36bps. Key downside risks: a) worse-than-expected asset quality as growth slows downin China; b) worse-than-expected contraction on domestic RMB NIM amidinterest rate de-regulation; c) regulatory risks on WMP and interbank business.
|
|