20140407-Maybank_KERPL-2013_takeaways__Potential_positive_surprises_in_2014_11页_670kb

报告摘要

2013 Takeaways: Potential Positive Surprises in 2014

Core Content

This document outlines the key financial and operational developments of H-share banks in 2013 and provides an outlook for 2014. It highlights the potential for positive surprises in net interest margin (NIM) and credit costs, as well as the stability in dividend payout and CET1 capital adequacy ratio (CAR). The report also includes a list of banks with their respective ratings, target prices, and financial metrics for 2013 and 2014.

Main Points

Positive NIM Outlook: The PBOC is unlikely to relax liquidity in 2014, which should help maintain SHIBOR at around 4%. Banks are expected to increase loan spreads and shift towards high-yield loans to offset rising funding costs. The NIM rebound in 4Q13 was driven by higher-yield consumer finance, increased loan spreads, and higher money market rates. The report forecasts a slight increase in NIM for most H-share banks in 2014.
Credit Costs: Despite a rise in write-offs and NPL disposals in 2013, credit costs did not surge due to high provision coverage. The potential launch of Document No.9 may prompt banks to reduce shadow banking exposure. Credit costs are expected to rise to 0.6-1.4% in 2014-15, with a chance of positive surprises due to a slower rise in NPLs and strong provision coverage.
Dividend Payout and CET1 CAR: Most H-share banks are expected to maintain a stable dividend payout ratio (30-35%) and CET1 CAR in 2014. Large banks may issue preference shares in 2014 to test market response and pricing, but not for capital replenishment.
Loan Growth: H-share banks reported healthy loan growth in 2013, with a slight slowdown in 2Q13 and 4Q13. Loan growth is expected to remain stable in 2014, shifting from Eastern and Southern China to Central and Western China, and from riskier sectors like real estate and manufacturing to more stable ones like residential mortgages, SMEs, consumer finance, and overseas lending.
Asset Quality: A mixed picture in asset quality was observed, with most banks reporting a rise in NPLs and credit costs, but some showing improvement. The report notes that H-share banks have accumulated sufficient provisions to cover overdue loans and most special mention loans.

Key Financial Metrics

Bank Name	BB Code	Rating	SP (HKD)	TP (HKD)	Upside (%)	Net Profit (2013)	Net Profit (2014F)	Net Profit (2015F)	P/E (2013)	P/E (2014F)	P/E (2015F)	P/B (2013)	P/B (2014F)	P/B (2015F)	ROE (2013)	ROE (2014F)	ROE (2015F)	Yield (2013)	Yield (2014F)	Yield (2015F)
ABC	1288 HK	BUY	3.36	4.45	32.4	166,315	179,400	208,405	5.3	4.9	4.2	1.0	0.9	0.8	20.9	19.9	20.3	6.6	7.2	8.3
BOC	3988 HK	BUY	3.38	4.15	22.8	156,911	158,576	182,448	4.8	4.8	4.1	0.8	0.7	0.7	17.9	16.3	16.8	7.2	7.3	8.4
BOCOM	3328 HK	SELL	5.07	4.40	(13.2)	62,295	53,344	61,471	4.8	5.7	4.9	0.7	0.7	0.6	15.6	12.2	12.8	6.4	5.3	6.1
BOCOQ	1963 HK	BUY	5.00	5.90	18.0	2,329	2,032	2,592	4.6	5.3	4.2	0.8	0.7	0.6	21.4	14.3	16.2	5.6	4.7	6.0
CCB	939 HK	BUY	5.40	6.70	24.1	214,657	228,634	247,871	5.0	4.7	4.4	1.0	0.9	0.8	21.4	20.1	19.1	6.9	7.4	8.0
CMB	3968 HK	BUY	13.98	15.90	13.7	51,743	55,910	67,453	4.9	5.0	4.2	1.1	0.9	0.8	22.2	19.6	20.6	5.5	6.0	7.2
CMSB	1988 HK	SELL	7.83	6.05	(22.7)	42,278	43,634	52,871	4.2	4.6	4.0	0.9	0.9	0.7	23.4	20.1	20.3	1.6	2.0	2.5
CNCB	998 HK	HOLD	4.55	3.95	(13.2)	39,175	35,097	40,276	4.4	4.9	4.2	0.8	0.7	0.6	18.5	14.8	15.2	6.9	6.2	7.1
CQRB	3618 HK	BUY	3.44	4.60	33.7	5,991	5,984	7,313	4.3	4.3	3.5	0.7	0.6	0.6	17.6	15.6	17.0	7.0	7.0	8.6
HUSB	3698 HK	BUY	3.53	3.90	10.5	4,926	5,205	6,295	6.3	6.0	5.0	1.0	0.9	0.8	18.9	15.6	17.0	5.5	5.8	7.1
ICBC	1398 HK	HOLD	4.74	5.00	5.5	262,649	257,633	285,806	5.1	5.2	4.7	1.0	0.9	0.8	21.9	19.0	18.6	6.9	6.8	7.5

2013 Results Review

Earnings: 2013 earnings were largely in line with consensus, with some banks like BOC and CCB reporting slightly higher-than-expected net profit due to better NIM and credit costs.
Loan Growth: All H-share banks reported steady or slightly rising loan growth, with the exception of BOCOM, which was cautious about riskier loans.
NIM: NIM for most H-share banks narrowed in 2013 due to asymmetric interest rate cuts, but rebounded in 4Q13 due to higher-yield loans and increased money market rates.
Fee Income: Net fees for large state-owned banks grew by 11-17% YoY, while other banks saw more than 24% growth, driven by bank card, settlement, and agency fees.
Cost Efficiency: Most H-share banks improved their cost-income ratio through tight cost control, except for BOCOM, which saw a rise due to expansion in digital banking.
Asset Quality: A mixed picture in asset quality, with most banks reporting a rise in NPLs and credit costs, but some showing improvement in NPL ratios and provision coverage.

2014 Earnings Outlook

Loan Growth: Expected to remain stable, with a shift towards Central and Western China and towards safer loan segments like residential mortgages and SMEs.
NIM: Limited pressure is expected due to increased loan spreads and shift to high-yield loans, with a slight upward revision in NIM forecasts.
Credit Costs: Projected to rise to 0.6-1.4% in 2014-15, but with potential for positive surprises due to slower NPL growth and high provision coverage.
Dividend and CET1 CAR: Expected to remain stable, with CMSB reducing its dividend payout to maintain CET1 CAR.
Equity Capital: No urgent need for capital replenishment, with some banks possibly issuing preference shares for market testing purposes.

Valuation and Recommendation

EPS Growth: Forecasted to grow at 5-16% CAGR from 2013-16, even under conservative assumptions.
Valuation Model: The Gordon Growth Model (GGM) is used to estimate fair value, with comparisons to historical P/E and P/B bands to assess target prices.
Recommendation: Maintain OVERWEIGHT for H-share banks, with ABC and CQRB as top picks due to their defensive positions and potential for positive surprises.

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