China CITIC Bank 0998

[winston]

China CITIC bank estimates H1 net up 150 pct
Sat Jul 5, 2008 2:11am EDT

HONG KONG, July 5 (Reuters) - China CITIC Bank (0998.HK: Quote, Profile, Research, Stock Buzz) (601998.SS: Quote, Profile, Research, Stock Buzz), a medium-sized commercial bank, estimated its net profit in the first half of this year rose by more than 150 percent from a year earlier, under Chinese accounting standards.

"The company's net interest margin has increased substantially. The company's income in intermediary business has increased quickly. The effective tax rate of the company has decreased substantially," the bank said in a statement to the Hong Kong stock exchange late on Friday.

CITIC Bank also estimated its non-performing loan ratio was under 1.45 percent at the end of June, and its provision cover ratio was over 115 percent.

In the first half of last year, the bank made a profit of 3.21 billion yuan ($469 million). It is due to make a full first-half earnings report next month.

[winston]

First-half profit jumps 163pc at CITIC Bank
KatherineNg

China CITIC Bank (0998), the banking unit of Beijing's CITIC Group, saw net profit rise 163 percent to 8.4 billion yuan (HK$9.57 billion) in the first half on higher lending and fee income and a lower tax rate, according to a statement to the Shanghai stock exchange.

Net interest income was up 62 percent from a year earlier to 18.2 billion yuan, owing to net interest margin expanding to 3.21 percent from 2.82 percent a year ago as banks repriced loans in response to six interest rate increases in 2007.

Non-interest income more than tripled to 2.022 billion yuan, from 623 million yuan a year earlier, while net fees and commissions on credit cards, custodian services and mutual fund sales jumped 128 percent to 1.38 billion yuan.

New loan growth slowed to 10.19 percent, from an historical average annual rate of 23 percent and an industry average 14 percent, to 6.33 trillion yuan in the first six months, after the central bank tightened policy and restricted lending to 2007 levels.

The bank said it has set aside 10.6 billion yuan against nonperforming loans which rose 8.36 percent during the period to 9.2 billion yuan. Its NPL ratio fell to 1.45 percent from 1.48 percent at the end of 2007 and capital adequacy ratio dropped 99 basis points to 14.28 percent.

Holdings in US Fannie Mae and Freddie Mac bonds of US$403 million (HK$3.14 billion) accounted for 0.64 percent of its total investment portfolio, the lender said.

[winston]

Not vested. From Phillips:-


Risk
NPL ratio might up due to the increase of NPLs in the middle and long run;
Delay of Right Issue.


Valuation

We still use three-stage DDM, assuming that the ROE is 12%, the cost of equity is 10% and the long-term dividend payout ratio is 25%, value the reasonable price of the Group would be HK$7.11.

We estimate the 12-month target price of CITIC Bank at HK$7.11, around 36% higher than current price of HK$5.22, equivalent to 11.3X P/E and 1.8x P/B 2011 respectively and maintain CITIC Bank on Buy rating.

[winston]

Not vested. From Phillips:-

Risk

NPL ratio might increase due to the growth of NPLs in the middle and long term;
Delay of Right Issue.


Valuation

We still use three-stage DDM, assuming that the ROE is 11.5%, the cost of equity is 10.5% and the long-term dividend payout ratio is 25%, value the reasonable price of the Group would be HK$7.35.

We give the 12-month target price of CITIC Bank at HK$6.98, 10% discount to its estimated price, and around 41% higher than current price of HK$4.94, equivalent to 10.9X P/E and 1.9x P/B 2011 respectively and maintain CITIC Bank on Buy rating.

[winston]

Not vested. From Phillips:-

Risk

NPL ratio might increase due to the growth of NPLs in the middle and long term;
Delay of Right Issue.


Valuation

We still use three-stage DDM, assuming that the ROE is 11.5%, the cost of equity is 10.5% and the long-term dividend payout ratio is 25%, value the reasonable price of the Group would be HK$7.35.

We give the 12-month target price of CITIC Bank at HK$6.98, 10% discount to its estimated price, and around 41% higher than current price of HK$4.94, equivalent to 10.9X P/E and 1.9x P/B 2011 respectively and maintain CITIC Bank on Buy rating.

[winston]

not vested

China lender lifts lid on bill-financing fraud worth 1b yuan

Source: The Standard

http://finance.thestandard.com.hk/en/bu ... aid=165733