Morningstar

Agricultural Bank of China Ltd Class H 01288

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Stock XHKG Rating as of
HK$3.83 −0.17 (4.25%)
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As of Delayed Price Open

Company Report

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China SOE Banks Earnings: Large Banks Lag Smaller Banks in NIM Recovery

Iris Tan

We maintain our fair value estimates for the state-owned enterprise banks in our coverage except for Agricultural Bank of China, which is seeing higher-than-expected net interest margins. We now increase ABC’s NIM assumption by 5 and 2 basis points in 2024 and 2025, respectively, which leads to a rise in fair value estimate to HKD 3.80 from HKD 3.50. Overall, there are no changes to our outlook for the other SOE banks.

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Price vs Fair Value

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01288 is trading at a 153% premium.
Price
HK$4.00
Fair Value
HK$5.40
Uncertainty
Medium
1-Star Price
HK$5.51
5-Star Price
HK$1.11
Economic Moat
Jvkks
Capital Allocation
Sknchshrq

Bulls Say, Bears Say

Bulls

We believe ABC's off-balance-sheet exposure to property risks is limited, given its relatively small scale of wealth management products and simple product structure.

Bears

The slowing revenue growth and hefty technology investment led to a deteriorating trend of ABC's cost/income ratio.

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News

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Trading Information

Previous Close Price
HK$4.00
Day Range
HK$3.82–4.04
52-Week Range
HK$2.73–4.04
Bid/Ask
HK$3.83 / HK$3.84
Market Cap
HK$1.34 Tril
Volume/Avg
374.8 Mil / 140.4 Mil

Key Statistics

Price/Earnings (Normalized)
5.41
Price/Sales
2.00
Dividend Yield (Trailing)
6.33%
Dividend Yield (Forward)
6.44%
Total Yield
6.33%

Company Profile

As one of the big four banks, ABC is headquartered in Beijing. The bank evolved from a state-owned specialized bank to a state-controlled commercial bank. It listed on the Hong Kong and Shanghai Stock Exchanges in 2010. ABC operates more than 20,000-branch network in China, providing corporate and retail banking products and services, and carries out treasury operations for its own accounts or for its customers. Shareholders Central Huijin, China's state-owned investment company, and the Ministry of Finance own 40.14% and 35.29%, respectively. Corporate banking, retail banking, and wholesale banking accounted for 41%, 56%, and 3% of total revenue in the first half of 2024, respectively. Rural banking and urban banking contributed 50% and 50% of total revenue during the same period.
Sector
Financial Services
Industry
Banks - Diversified
Stock Style Box
Large Value
Total Number of Employees
446,023
Website
https://www.abchina.com

Competitors

Valuation

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Metric
01288
601988
601939
Price/Earnings (Normalized)
 5.416.836.23
Price/Book Value
 0.530.640.66
Price/Sales
 2.002.542.67
Price/Cash Flow
 9.067.059.71
Price/Earnings
01288
601988
601939

Financial Strength

Metric
01288
601988
601939
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 ———
Quick Ratio
No chart available

Profitability

Metric
01288
601988
601939
Return on Assets (Normalized)
 0.66%0.71%0.85%
Return on Equity (Normalized)
 11.13%10.36%11.26%
Return on Invested Capital (Normalized)
 ———
Return on Assets
01288
601988
601939

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