ICBC: Resilient Earnings and Undervalued Upside Support a Maintained Buy Rating

In a report released today, Richard Xu from Morgan Stanley maintained a Buy rating on Industrial and Commercial Bank of China, with a price target of HK$8.00.

Richard Xu has given his Buy rating due to a combination of factors that, in his view, support a favorable risk‑reward profile for Industrial and Commercial Bank of China. After reviewing the bank’s third‑quarter 2025 results, he modestly trimmed profit forecasts because of a slower-than-anticipated rebound in net interest margins at state-owned banks, but this was partly offset by stronger-than-expected fee income growth. The resulting reductions in net profit estimates for 2025–2027 are small, suggesting that ICBC’s earnings power remains broadly intact. At the same time, he raised his target price from HK$7.6 to HK$8.0, implying meaningful upside from the prevailing share price of HK$6.03.

Richard Xu’s stance indicates that, despite near-term margin pressure, the bank’s diversified income base and improving fee businesses underpin its long-term investment case. The moderate adjustment to earnings, coupled with a higher target price, reflects his view that the market is underestimating ICBC’s capacity to deliver stable profitability. In his assessment, the current valuation does not fully capture this resilience, leaving room for share price appreciation. This combination of limited downside from small forecast cuts and attractive upside potential justifies maintaining a Buy recommendation on the stock.

Xu covers the Financial sector, focusing on stocks such as Ping An Insurance Company of China, AIA Group, and Industrial and Commercial Bank of China. According to TipRanks, Xu has an average return of 4.3% and a 56.82% success rate on recommended stocks.