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Agricultural Bank of China Class H (HK:1288)
:1288

Agricultural Bank of China (1288) AI Stock Analysis

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HK

Agricultural Bank of China

(OTC:1288)

Rating:82Outperform
Price Target:
Agricultural Bank of China receives a strong overall score due to its robust financial performance and positive outlook from the recent earnings call. The stock is undervalued with a high dividend yield, making it attractive for income-focused investors. While the technical analysis indicates a potential short-term consolidation, the long-term fundamentals remain solid.
Positive Factors
Dividend Yield
Reiterate BUY with TP revised up to HKD5.3; offers >5% dividend yield.
Domestic Growth Strategy
ABC is less exposed to US tariff impacted sectors, with over 40% of its loan book in county-area loans, leading to more domestically driven growth.
Earnings Growth
Expect ABC to continue delivering solid earnings growth following strong results.
Negative Factors
Market Valuation
ABC is trading at a slight premium over SOE banking peers, which is seen as reasonable given its stronger-than-peers earnings growth.
Net Interest Margin
Expect a further drop in NIM due to the loosening monetary policy environment.

Agricultural Bank of China (1288) vs. iShares MSCI Hong Kong ETF (EWH)

Agricultural Bank of China Business Overview & Revenue Model

Company DescriptionAgricultural Bank of China Limited provides corporate and retail banking products and services. The company operates through Corporate Banking, Personal Banking, and Treasury Operations segments. It offers demand, personal call, foreign currency time, foreign currency call, time or demand optional, foreign exchange demand, foreign exchange call, foreign exchange time, certificates of deposit, savings, agreed-term, and negotiated deposits; and loans comprise housing, consumer, business, fixed asset, working capital, real estate, and entrusted syndicated loans, as well as trade finances, guarantees and commitments, and loans with custody of export rebates accounts. The company also provides credit card, debit card, payment and settlement, private banking, cash management, investment banking, custody, financial market, and financial institution services, as well as trading and wealth management services; and personal fund collection and automatic transfer services. In addition, it offers agro-related personal and corporate banking products and services; personal and online, telephone, mobile, self-service, television, and SMS banking services; financial leasing services; fund management services; assets custodian services; debt-to-equity swap and related services; and life, health, and accident insurance, as well as reinsurance products. As of December 31, 2021, the company had 22,807 domestic branches, including three specialized institutions, 4 training institutes, 37 tier-1 branches, 402 tier-2 branches, 3,348 tier-1 sub-branches, 18,961 foundation-level branch outlets and 50 other establishments; and 13 overseas branches in Hong Kong, Singapore, Seoul, New York, Dubai International Financial Centre, Tokyo, Frankfurt, Sydney, Luxemburg, Dubai, London, Macao, and Hanoi; and four overseas representative offices in Vancouver, Taipei, Sao Paulo, and Dushanbe. Agricultural Bank of China Limited was founded in 1951 and is based in Beijing, the People's Republic of China.
How the Company Makes MoneyThe Agricultural Bank of China generates revenue through several key streams. Primarily, it earns money from interest income on loans extended to individuals, businesses, and agricultural enterprises. This includes personal loans, mortgages, and business loans, with a significant focus on financing for rural and agricultural projects. ABC also makes money from fees and commissions on various financial services, such as wealth management, insurance products, and transaction services. Additionally, the bank engages in treasury operations, generating income from investments in securities, foreign exchange trading, and other financial instruments. Strategic partnerships with government entities and corporations further bolster its earnings, particularly in terms of financing infrastructure and development projects across China.

Agricultural Bank of China Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q4-2024)
|
% Change Since: 10.14%|
Next Earnings Date:Sep 01, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, robust loan growth, and improved asset quality. However, the bank faced challenges with deposit growth, non-interest income, and a narrowing NIM. Overall, the highlights outweigh the lowlights, indicating a positive outlook.
Q4-2024 Updates
Positive Updates
Strong Financial Performance
In 2024, ABC reported a total net profit of RMB222.7 billion, a growth of 4.8%, and operating income of RMB711.4 billion, an increase of 2.3%. The interest income was RMB580.7 billion, up by 1.6%.
Robust Loan Growth
The bank reported newly grown loans of RMB2.29 trillion, marking a 10.13% increase. The growth of corporate and individual loans led among peers, with individual loan discrepancy at 0.42%.
Improved Asset Quality
Asset quality was sound with an NPL ratio of 1.3%, down by 3 basis points from the previous year-end. The special mention loan ratio was 1.4%, down by 2 basis points.
Capital and Stock Performance
ABC issued around RMB320 billion in TLAC and capital bonds, with a capital adequacy ratio increase of 1.05%. The stock price of A shares and H shares increased by 55% and 58%, respectively.
Green and Inclusive Finance Growth
Green finance strategy led to a green bond balance of RMB4.97 trillion, an increase of 22.9%. Inclusive finance loan balance increased by more than 30% for six consecutive years, totaling RMB4.66 trillion.
Negative Updates
Pressure on Deposit Growth
The deposit growth faced pressure, although the deposit growth was around RMB2.2 trillion. The interest-paying ratio was 1.56%, with a slight increase compared to the previous year.
Challenges in Non-interest Income
Despite some recovery, the net fee income faced challenges with a slight drop overall, though there was a slight improvement of 2 basis points from the previous quarter.
Narrowing NIM
The net interest margin (NIM) was 1.42%, down by 3 basis points from the second half, indicating a continued pressure on NIM.
Company Guidance
During the 2024 Annual Results Announcement of ABC, Wang Wenjing, Vice President of ABC, provided a comprehensive overview of the company's financial performance and strategic initiatives. Key metrics for 2024 included a total net profit of RMB222.7 billion, representing a 4.8% increase, and operating income of RMB711.4 billion, up by 2.3%. Interest income grew by 1.6% to RMB580.7 billion, while the newly issued growth loan amounted to RMB2.29 trillion, a 10.13% increase. The NPL ratio improved to 1.3%, down by 3 basis points, and the provision coverage ratio reached 299%. ABC's capital adequacy ratio increased by 1.05%, with a CET1 CAR of 11.42%. A shares and H shares saw notable increases of 55% and 58%, respectively. The dividend payout was recommended at RMB2.419 per 10 shares, resulting in approximately RMB80 billion in dividends. The company's emphasis on enhancing financial services to agriculture and rural areas was evident, with county-level growth exceeding RMB1 trillion. ABC's green finance strategy resulted in a 22.9% increase in green bond balances to RMB4.97 trillion. The inclusive finance loan balance increased by over 30% for six consecutive years, reaching RMB4.66 trillion. The company also reported significant advancements in fintech, pension finance, and digital finance, with digital finance loans growing by 34.8% to RMB5.73 trillion. The outlook for 2025 is positive, with expectations for continued growth driven by supportive monetary and fiscal policies, infrastructure investment, and a stable consumption environment, further strengthening ABC's role in serving the real economy.

Agricultural Bank of China Financial Statement Overview

Summary
Agricultural Bank of China exhibits robust financial performance with significant revenue growth and high profitability. The balance sheet is strong with zero debt and a stable equity position. Cash flow management is efficient, despite some fluctuations in free cash flow. Overall, the bank is well-positioned for future growth.
Income Statement
85
Very Positive
The Agricultural Bank of China shows a strong financial performance with significant revenue growth from 2023 to 2024 at 26.93%. The net profit margin for 2024 is 39.71%, indicating high profitability. Despite the absence of EBIT and EBITDA data for 2024, the historical EBIT margins have been robust. Overall, the income statement demonstrates a trend of increasing revenue and strong profitability.
Balance Sheet
90
Very Positive
The balance sheet is solid with a strong equity position, as evidenced by a healthy equity ratio of 7.15% in 2024. The bank has managed to operate with zero debt in 2024, highlighting excellent financial health. The consistent increase in stockholders' equity indicates stability and growth potential.
Cash Flow
80
Positive
Operating cash flow remains strong at 1.35 trillion in 2024, with a high free cash flow to net income ratio. Although there is a decline in free cash flow from 2023 to 2024, the cash flow from operations comfortably supports net income, showing efficient cash management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
711.06B710.48B559.76B724.87B719.51B657.44B
Gross Profit
711.06B710.48B694.64B724.87B719.51B657.44B
EBIT
405.01B450.82B318.35B825.25B295.13B264.57B
EBITDA
77.59B0.000.000.000.000.00
Net Income Common Stockholders
283.63B282.08B269.36B259.23B241.18B215.93B
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.02T3.35T4.57T3.76T3.08T3.51T
Total Assets
44.82T43.24T39.87T33.93T29.07T27.21T
Total Debt
0.000.002.68T2.20T1.80T1.76T
Net Debt
-4.02T-3.35T-4.57T-1.56T-1.28T-1.74T
Total Liabilities
41.68T40.14T36.98T2.20T1.80T1.76T
Stockholders Equity
3.14T3.09T2.89T2.67T2.41T2.20T
Cash FlowFree Cash Flow
-223.00B1.33T1.80T1.30T213.58B-83.78B
Operating Cash Flow
-199.35B1.35T1.83T1.32T239.62B-60.94B
Investing Cash Flow
-1.20T-2.24T-1.33T-1.05T-331.24B-469.26B
Financing Cash Flow
536.71B225.63B5.20T298.22B54.00B269.80B

Agricultural Bank of China Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.32
Price Trends
50DMA
4.81
Positive
100DMA
4.66
Positive
200DMA
4.21
Positive
Market Momentum
MACD
0.12
Negative
RSI
71.60
Negative
STOCH
94.99
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1288, the sentiment is Positive. The current price of 5.32 is above the 20-day moving average (MA) of 5.06, above the 50-day MA of 4.81, and above the 200-day MA of 4.21, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 71.60 is Negative, neither overbought nor oversold. The STOCH value of 94.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1288.

Agricultural Bank of China Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
HK$2.10T6.0510.80%7.22%-0.43%11.31%
64
Neutral
$12.77B9.777.59%16985.66%12.30%-7.71%
$209.58B5.859.57%5.51%
$73.50B5.59
5.84%
$233.26B5.0910.81%6.00%
$155.62B8.1914.86%4.33%
$331.33B5.49
8.36%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1288
Agricultural Bank of China
5.32
2.17
69.05%
BACHF
Bank of China
0.60
0.18
42.86%
BKFCF
Bank of Communications Co
0.90
0.23
34.33%
CICHF
China Construction Bank
0.93
0.30
47.62%
CIHHF
China Merchants Bank Co
6.42
2.12
49.30%
IDCBF
Industrial and Commercial Bank of China
0.75
0.23
44.23%

Agricultural Bank of China Corporate Events

Agricultural Bank of China Approves Key Governance Proposals
Apr 29, 2025

The Agricultural Bank of China Limited held a board meeting on April 29, 2025, where several key proposals were approved unanimously by all 13 directors. These proposals include revisions to the Articles of Association, Rules of Procedure for both the Shareholders’ Meeting and the Board of Directors, matters related to the dissolution of the Board of Supervisors, and the external donation quota for 2025. These proposals will be presented at the shareholders’ general meeting for further consideration and approval, indicating a strategic move to streamline governance and enhance operational efficiency.

Agricultural Bank of China Releases Q1 2025 Pillar 3 Report
Apr 29, 2025

The Agricultural Bank of China has released its Pillar 3 report for the first quarter of 2025, highlighting its risk management strategies and regulatory compliance. The report outlines key prudential regulatory metrics and risk-weighted assets, emphasizing the bank’s commitment to maintaining financial stability and liquidity. This release is crucial for stakeholders as it provides insights into the bank’s operational resilience and adherence to macroprudential regulatory measures, which are vital for its industry positioning and future growth.

Agricultural Bank of China Reports Q1 2025 Financial Results
Apr 29, 2025

Agricultural Bank of China Limited announced its unaudited financial results for the first quarter of 2025, showing a slight increase in operating income and net profit compared to the same period in 2024. However, the bank experienced a significant decrease in net cash flows from operating activities. The total assets of the bank increased by 3.66% from the end of 2024, indicating a growth in its financial position.

Agricultural Bank of China to Review Q1 2025 Financial Results
Apr 15, 2025

The Agricultural Bank of China Limited has announced that its board of directors will hold a meeting on April 29, 2025, to review and approve the financial results for the first quarter ending March 31, 2025. This meeting is crucial as it will provide insights into the bank’s financial performance and strategic direction, potentially impacting stakeholders and the bank’s market positioning.

Agricultural Bank of China Releases 2024 Pillar 3 Report on Risk Management
Mar 28, 2025

Agricultural Bank of China has released its 2024 Pillar 3 Report, highlighting its robust risk management strategies and adherence to regulatory metrics. The report underscores the bank’s commitment to maintaining a strong capital composition and managing various risks, including credit, market, and liquidity risks, which are crucial for its operational stability and industry positioning.

Agricultural Bank of China Announces Final Dividend for 2024
Mar 28, 2025

Agricultural Bank of China Limited has announced a proposed distribution of a final cash dividend for the year ended December 31, 2024, amounting to RMB 1.255 per 10 shares. The dividend’s payment date is set for August 27, 2025, with the ex-dividend date on July 9, 2025, and the record date on July 16, 2025. This announcement reflects the bank’s continued commitment to providing shareholder returns and may impact investor sentiment positively.

Agricultural Bank of China Approves Key Resolutions in Board Meeting
Mar 28, 2025

The Agricultural Bank of China Limited’s board of directors recently held a meeting to approve key resolutions, including the profit distribution plan for 2024 and the appointment of Mr. Zhang Qi to several special committees. These decisions reflect the bank’s strategic focus on governance and shareholder value, with the profit distribution plan aligning with legal and regulatory requirements, and Mr. Zhang’s appointment enhancing the board’s expertise in critical areas.

Agricultural Bank of China Reports Strong 2024 Financial Results
Mar 28, 2025

The Agricultural Bank of China announced its audited financial results for 2024, reporting a net profit of RMB282,671 million and a capital adequacy ratio of 18.19%. With total assets of RMB43,238,135 million, the bank continues to strengthen its position in the financial sector, supported by its extensive domestic and international branch network. The announcement underscores the bank’s commitment to high-quality development and its strategic focus on rural and inclusive finance, green finance, and digitalization, which are expected to enhance its market positioning and stakeholder value.

Agricultural Bank of China to Present 2024 Annual Results
Mar 20, 2025

Agricultural Bank of China Limited has announced that it will publish its 2024 annual results on March 28, 2025, and will host a webcast presentation to discuss these results with investors, analysts, and media. The presentation aims to provide a comprehensive understanding of the bank’s business operations and financial performance for 2024, with senior management and independent directors available to address common concerns and questions.

Agricultural Bank of China Schedules Board Meeting for Annual Results and Dividend Decision
Mar 18, 2025

Agricultural Bank of China Limited has announced that its board of directors will meet on March 28, 2025, to review and approve the annual financial results for the year ending December 31, 2024, and to consider the payment of a final dividend. This meeting is significant as it will determine the bank’s financial performance and dividend distribution, impacting stakeholders and potentially influencing its market position.

Agricultural Bank of China Appoints New Executive Vice President
Mar 4, 2025

Agricultural Bank of China Limited has appointed Mr. MENG Fanjun as an executive vice president, following the approval of his qualification by the National Financial Regulatory Administration. This appointment is expected to strengthen the bank’s executive team and potentially enhance its strategic operations and market positioning.

Agricultural Bank of China’s EGM Approves Key Resolutions
Feb 21, 2025

Agricultural Bank of China Limited held its 2025 first extraordinary general meeting (EGM) where shareholders approved an ordinary resolution to elect Mr. ZHANG Qi as an independent non-executive director and a special resolution to issue capital instruments and total loss-absorbing capacity non-capital bonds. These approvals reflect the bank’s ongoing efforts to strengthen its governance structure and enhance its financial stability, positioning it to better respond to market challenges and regulatory requirements.

Agricultural Bank of China Announces Key Resolutions Including Executive Appointment and Dividend Scheme
Feb 14, 2025

The Agricultural Bank of China Limited held a board meeting where three major resolutions were approved: the fixed assets investment budget for 2025, the appointment of Mr. Meng Fanjun as an executive vice president, and the dividend payment scheme for the second tranche of preference shares. These decisions indicate the bank’s strategic focus on strengthening its executive team and rewarding shareholders, potentially impacting its operational efficiency and shareholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.