Raising Select Chinese Banks’ Valuations on Improved NIM and Credit Quality Outlook

We raise our fair value estimates for select China banks after revisiting key model assumptions. Recent industry developments indicate improved prospects for net interest margins, or NIMs, and corporate credit quality. Our respective fair values for Industrial and Commercial Bank of China, or ICBC, China Construction Bank, or CCB, Agricultural Bank of China, or ABC, Bank of China, or BOC, China Merchants Bank, or CMB, and China Citic Bank, or CITIC, rise by 4% to 15%, to HKD 6.1, HKD 7.6, HKD 4.8, HKD 4, HKD 50, and HKD 6.2.