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雷达卡
【出版时间及名称】：China Banks
【作者】：JP Morgan
【文件格式】：pdf
【页数】：48
【目录或简介】：
2011 will be a better year.
We expect the 11 banks under our coverage topost average 22% profit growth in 2011 (12% EPS growth) and 18% in 2012.
We believe investors' patience will be rewarded in 2011 as confidence in theeconomy and asset quality returns, leading to some re-rating opportunities.
Liquidity tightening on back of a strong economy does not hurt.
Anumber of expected tightening measures are mainly for sterilization of risingFX inflows. We argue Chinese banks can afford a much higher RRR, givenvery liquid balance sheets and expected low L/D ratios on the new volumes in2011/12. We note investors' fears of tightening hurting equities finds littleempirical evidence. MSCI China in the past 10 years has shown high positivecorrelation with tightening measures (RRR & rate hikes) and inflation, giventhey are typically associated with economic upcycle - this time is the same.
Regulators to stay tough, but little new measures after a noisy 2010.
Consistent with tighter regulations globally, CBRC may remain at theforefront of economic policy implementations. We however don't expectmaterial new measures. CBRC may launch China version of Basel 3, but webelieve it will be realistic and that most banks will not need new equity. Majoruncertainty is the grace periods for different banks to reach 2.5% LLR toloans. Our new estimates assume banks will achieve this by 2012 or 2013.
Higher credit costs from additional GP:
While NIM trend is slightly betterthan expected, we modestly cut FY11-12E earnings to reflect higher creditcosts assumptions in many medium-sized banks as they take additional GP tomeet with new 2.5% LLR to loan requirement. EPS revision was generallymodest except for BOC-H, BoComm-H, CMB-H and SDB-H.
Good upside to our Dec-11 PTs.
Our conservative sustainable ROE & LTgrowth reflect higher capital requirement and some sector long-term issuessuch as less volume growth and rate deregulations in longer-term. We still seegood upside on the back of attractive valuation and expected earnings growthin coming years. We upgrade Minsheng-H to OW (AFL) which replaces Citic-H as one of our top picks along with ICBC-H. We downgrade ABC-H,BoComm-H and BOC-H/BOC-A to Neutral purely on a sector-relative basis.
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