DBS analyst Manyi Lu reiterated a Buy rating on Industrial and Commercial Bank of China (IDCBF – Research Report) today and set a price target of HK$6.20.
Manyi Lu has given his Buy rating due to a combination of factors that highlight the Industrial and Commercial Bank of China’s (ICBC) strong financial position and growth potential. Despite a slight decline in net profit for the first quarter of 2025, the bank’s loan volume showed a steady increase, which is expected to support net interest income amidst pressure on net interest margins. This growth in loan volume, particularly in the corporate sector, aligns with the performance of other state-owned enterprise banking peers, indicating ICBC’s robust asset management.
Furthermore, the bank’s asset quality remains stable, with a slight decrease in the non-performing loan ratio. The anticipated earnings growth, supported by a favorable economic outlook in China, further bolsters the bank’s prospects. Manyi Lu also notes that the impact of any potential share dilution from capital injections is likely to be minimal, given ICBC’s strong capital position. The revised price target reflects these positive factors, alongside a lower cost of equity assumption, suggesting reduced systematic risk for Chinese banks.
Lu covers the Financial sector, focusing on stocks such as Agricultural Bank of China, Bank of Communications Co, and BOC Hong Kong (Holdings). According to TipRanks, Lu has an average return of 23.6% and a 75.00% success rate on recommended stocks.
In another report released on April 21, J.P. Morgan also maintained a Buy rating on the stock with a HK$6.60 price target.