中国 : 银行 整装再发 : 四大行有望获益最多 ; 首次覆盖银行股 : 首选农业银行 H 股 ( 强力买入 )( 摘要 ) 证券研究报告

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1 2017 年 3 月 13 日 中国 : 银行 整装再发 : 四大行有望获益最多 ; 首次覆盖银行股 : 首选农业银行 H 股 ( 强力买入 )( 摘要 ) 证券研究报告 短期担忧缓解我们认为中国银行业的信贷质量周期已过拐点, 短期内 (1) 企业盈利回升和 (2) 银行贷款结构改善有望带动提高银行业资产质量 我们认为这些因素, 再加之利率上行和强劲的企业贷款需求, 将在未来三年推动银行净息差扩大 ( 四大行有望提升 20 个基点 ) 及税后净利润增长 35% 此外, 我们的分析显示, 即便在经过表外负债和同业非标资产调整后, 多数银行仍拥有充裕的资本 但中长期资产质量问题犹存不过这并不表示我们认为中国银行业已经摆脱了困境 鉴于所有贷款的潜在不良率依然在 8% 左右, 中国银行业资产质量问题仍不可小视 不过, 得益于监管措施和企业盈利改善为业已强劲的资本充足率构筑了支撑, 中国银行业可以整装再发 解决潜在问题 我们对于中国银行业的整体观点请参见同时发表的研究报告 中国 : 银行 : 深呼吸, 整装再发 * 全文翻译随后提供 我们采用股价 / 拨备前营业利润估值法来为中国银行股估值由于银行业盈利能力改善, 而且围绕银行不良贷款和潜在再融资需求的担忧缓解, 我们认为关注银行内在盈利生成能力的基于拨备前营业利润的估值法更为适用 我们认为风险回报具有相当的上行空间 如果银行股经增速调整的股价 / 拨备前营业利润朝历史中值重估, 则蕴含 40% 的上涨潜力 首次覆盖 22 只股票 ;8 只买入 3 只卖出我们认为多只中国银行股存在可观的上行空间 H 股 : 我们的首选股是农业银行 H 股 ( 强力买入, 上行空间 34%), 因该行强劲的存款业务实力和较低的同业融资使其能够成为加息的主要受益者 在四大行中, 我们还看好工商银行 ( 买入评级, 上行空间 34%) 我们也看好规模较小的邮储银行( 买入评级, 上行空间 42%) 我们对交通银行评为卖出 (15%), 因其拨备前营业利润增速慢于同业 A 股 : 由于净息差提高且资产质量改善, 我们对四大行 A 股评级均为买入 ( 上行空间为 23%-30%) 我们看好中信银行 ( 买入, 上行空间 17%), 因其业务潜力尚未充分反映在股价之中, 我们对浦发银行和兴业银行 ( 上行空间 1%/ 下行空间 2%) 的评级均为卖出, 因为它们的拨备前营业利润不及同业 请参阅相关报告 中国 : 银行 : 深呼吸, 整装再发 ;2017 年 3 月 13 日 杨硕, Ph.D ( 研究助理 ) +86(10) shuo.yang@ghsl.cn 北京高华证券有限责任公司 唐伟城, CFA ( 分析师 ) 执业证书编号 : S (10) weicheng.tang@ghsl.cn 北京高华证券有限责任公司王逸, CFA ( 分析师 ) 执业证书编号 : S (21) yi.wang@ghsl.cn 北京高华证券有限责任公司 北京高华证券有限责任公司及其关联机构与其研究报告所分析的企业存在业务关系, 并且继续寻求发展这些关系 因此, 投资者应当考虑到本公司可能存在可能影响本报告客观性的利益冲突, 不应视本报告为作出投资决策的唯一因素 有关分析师的申明和其他重要信息, 见信息披露附录, 或请与您的投资代表联系 北京高华证券有限责任公司投资研究

2 Exhibit 1: China Banks Valuation Summary - ABC is our top pick, but plenty of Buys Ticker Company Rating 9-Mar Price Mkt Cap US$bn 12-month Target Price Potential upside/ downside P/B (X) TP implied P/B (X) PPOP growth (%) Historical CAGR PPOP growth NPL coverage Hisotrical NPL coverage 2017E 2018E 2017E 2018E 17-19E CAGR CAGR 1H Historical median P/PPOP Adjustment 1: Historical average P/PPOP Adjustment 2: Provision/ NPL 1398.HK ICBC (H) Buy (HKD) % % 13% HK BOC (H) Neutral (HKD) % % 13% HK CCB (H) Neutral (HKD) % % 14% HK ABC (H) Buy * (HKD) % % 14% HK BoCom (H) Sell (HKD) % % 13% HK CMB (H) Neutral (HKD) % % 28% (0.25) 0998.HK CNCB (H) Neutral (HKD) % % 23% (0.25) 3618.HK CQRCB Neutral (HKD) % % 27% (0.25) HK PSBC Buy (HKD) % % SS ICBC (A) Buy (CNY) % % 13% SS BOC (A) Buy (CNY) % % 13% SS CCB (A) Buy (CNY) % % 14% SS ABC (A) Buy (CNY) % % 14% SS BoCom (A) Neutral (CNY) 6.6 7% % 13% SS CMB (A) Neutral (CNY) % % 28% (0.25) SS CNCB (A) Buy (CNY) % % 23% (0.25) SS SPDB Sell (CNY) % % 29% (0.25) (0.25) SS Industrial Sell (CNY) % % 33% (0.25) (0.25) SZ PAB Neutral (CNY) % % 44% (0.25) SS Hua Xia Neutral (CNY) % % 23% (0.25) SZ BONB Neutral (CNY) % % 29% (0.25) SS BONJ Neutral (CNY) % % 36% (0.25) 0.25 *Conviction List. ICBC: Industrial and Commercial Bank of China. CCB: China Construction Bank. BOC: Bank of China. ABC: Agricultural Bank of China. BoCom: Bank of Communications. CMB: China Merchants Bank. CNCB: China CITIC Bank. CQRCB: Chongqing Rural Commercial Bank. SPDB: Shanghai Pudong Development Bank. Industrial: Industrial Bank. PAB: Ping An Bank. BONJ: Bank of Nanjing. BONB: Bank of Ningbo. Source: Datastream, Goldman Sachs Global Investment Research Gao Hua Securities acknowledges the role of Tian Lu, CFA, Frank Shi, Lucy Liu, Wendy Chen and Katherine Liu of Goldman Sachs in the preparation of this product. See the Appendix of this report from page 44 for a detailed discussion of the valuation methodology we apply to our China Banks coverage. 全球投资研究 2

3 Table of contents Financials analysis 5 Widening NIM/recovering asset quality but impact on individual banks varies 6 Company profiles 9 ABC (1288.HK): Strong deposit franchise, undemanding valuation; initiate at Buy (H on CL) 10 ICBC (1398.HK): Asset quality alleviates regulatory concerns; initiate at Buy 16 CCB ( SS): NIM upside with strong asset quality; initiate A-shares at Buy 18 BOC ( SS): Abundant capital limits downside, NIM driving upside; initiate A at Buy 20 PSBC (1658.HK): Upside potential from both NIM and balance sheet growth; reiterate Buy 22 CNCB ( SS): New business potential not fully priced in; initiate A-shares at Buy 24 SPDB ( SS): Wrong side of interest rate cycle amid policy headwinds; initiate Sell 26 Industrial Bank ( SS): Wholesale/NSCA reliance driving underperformance; Sell 28 BoCom (3328.HK): Unfavorably positioned vs peers amid rate hike/mpa; initiate H at Sell 30 CMB (3968.HK): NIM expansion constrained by NPL/balance sheet growth; initiate Neutral 32 PAB ( SZ): Strong fee growth yet low asset quality; initiate at Neutral 34 Hua Xia ( SS): Less capital concern, higher-risk loan book; initiate at Neutral 36 BONB ( SZ): Capital adequacy overshadows B/S + earnings growth; initiate Neutral 38 BONJ ( SS): Fast NPL formation/recap concerns limit upside potential; Neutral 40 CQRCB (3618.HK): NIM play repressed by regulatory headwind; initiate at Neutral 42 Appendix Valuation 44 Disclosure Appendix 48 Prices in this report are as of the March 9, 2017 close unless otherwise stated. Check out our thematic and related macro reports below: China Banks: Breathing Space, March 13, 2017 China Credit Conundrum: Mapping China s Credit, March 3, 2017 China Strategy: Less pain, better price; Tactically upgrading to Overweight, March 13, 2017 Asia Strategy: Refining the reflation theme: Upgrade China to OW, favor Financials, March 13, 2017 Key terms and acronyms explained NSCA: Non-Standard Credit Assets. LGFV: Local Government Funding Vehicle. EIC: EBIT interest coverage. Implied NPL ratio: debts of companies with less than 1x EIC as % of total debt. Potential NPL ratio: our assessment of the real NPL ratio. Reported NPL ratio: NPL ratio reported in banks financial statements. SOE: State owned enterprise. POE: Privately owned enterprise. NCD: Negotiable Certificate of Deposit. CD: Certificate of Deposit. RWA: Risk weighted assets. LDR: Loan-deposit ratio. 全球投资研究 3

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5 Financials analysis Financials analysis 全球投资研究 5

6 Widening NIM/recovering asset quality, but impact on individual banks varies We expect China banks under our coverage to collectively record a E NPAT CAGR of 10%, accelerating from 4% in , thanks to widening NIM, steady fee income growth, recovering asset quality, and stable credit costs. We expect moderation in bank asset growth given tighter regulations but see the impact varying among different banks with different asset mix. Overall, we prefer banks with 1) strong deposit/lending franchises and limited reliance on interbank funding to drive NIM upside, 2) large branch network and retail client bases to derive stronger fee growth, 3) smaller old economy loan books and large capital to buffer any potential credit cost downside, and 4) limited NSCA/off-balance-sheet wealth management product (WMP) exposure to ease regulatory headwinds. Specifically: We expect 14bps aggregate NIM expansion between 2016 and 2019, thanks to higher loan yields driven by stronger loan demand (interest income), rising interbank rates (interest income/cost) and sticky deposit rates (interest cost). China s Big 4 banks (BOC, CCB, ICBC, ABC) will be the biggest beneficiaries in our view, averaging 20bps NIM expansion during 16-19E. We attribute this to their strongest deposit franchises and low reliance on interbank funding, as well as their established client bases across industrials and infrastructure companies, the two fastest sources of growth for loans, enabling the Big 4 to effectively re-price loans as yields go up. We forecast a 10% aggregate net fee income CAGR over E, thanks to banks increasing focus on non-lending businesses, such as credit cards and professional wealth management services. We see PSBC/CQRCB/ABC delivering the strongest fee income growth among peers at +29%/+17%/+15% E CAGRs, on the back of both their extensive branch networks/retail client franchises and still low base of fee income as % of total revenue, at only 5%/7%/15% in 2015 vs. a sector average 19%. With recovering asset quality, we now expect the sector NPL formation rate to stabilize at 1.14%/1.17% in 2018/19E from 2015 s high of 1.33%, thanks to improving corporate profitability (EBIT/interest coverage ratio for industrial corporates rose from 4.48X in 1Q16 to 5.84X in 4Q16) as well as banks accelerating shift in loan mix toward the lower-npl consumer sector and reduced exposure to old economy industries.. We prefer the Big 4, particularly our CL-Buy ABC, for their strong capital/provisioning capacity to buffer any potential NPL losses and subsequent recap needs (ICBC/CCB/BOC/ABC s tier-1 capital adequacy ratios (CARs) were 13%/13%/12%/11% in 2015 vs. the rest of the sector s average of 10%. We estimate banks aggregate earning assets to grow at an 8% CAGR over E from 11% CAGR, given regulators have proposed multiple measures to contain excessive credit growth since In particular, the formal implementation of MPA from 1Q17 may substantially curtail banks NSCA/off-balance-sheet WMP product growth and reduce their earnings growth potential. However we expect headwinds mainly for banks that lack strong lending franchises or have weak capital to support the RWAheavy loan business, and forecast Sell-rated SPDB/Industrial Bank to see earning asset CAGR slowing to 12%/11% in E from 17%/19% in Banks with strong loan-making capacity should see limited impacts. We are generally in line with Bloomberg consensus on revenue (-2%/0%/1% for 2016E/17E/18E), but above on net profit (6%/10% above Bloomberg consensus for 2017E/18E). 全球投资研究 6

7 Exhibit 2: We expect expanding NIM, steady fee income growth, stabilizing NPL formation rate and slower loan growth across our bank coverage % E 2017E 2018E 2019E Gross loan growth Corp loan Retail loan NIM Loan yield Deposit cost Fee growth Fee % PPOP growth Credit cost NPAT growth (1.2) Assumptions NPL formation rate LLR/ NPL LLR/ loan CIR LDR Source: Company data, Goldman Sachs Global Investment Research. Exhibit 3: but expect differentiated performance among banks due to their wholesale funding reliance, asset structure and deposit/lending franchise Loan growth (%) E 2017E 2018E 2019E NIM yoy (bp) E 2017E 2018E 2019E Note on color code: dark blue = 1 st quartile, light blue = 2 nd quartile, light grey = 3 rd quartile, dark grey = 4 th quartile Source: Company data, Goldman Sachs Global Investment Research. Fee income growth (%) E 2017E 2018E 2019E ICBC 11% 8% 9% 8% 6% 6% ICBC ICBC 9% 10% 8% 8% 7% 7% CCB 10% 11% 10% 9% 7% 7% CCB CCB 4% 8% 7% 7% 7% 7% BOC 12% 8% 11% 9% 8% 6% BOC BOC 11% 2% 4% 11% 7% 6% ABC 11% 10% 10% 9% 8% 11% ABC ABC -2% 3% 17% 20% 15% 10% BoCom 5% 8% 9% 7% 6% 6% BoCom BoCom 12% 16% 8% 8% 6% 5% PSBC 26% 32% 15% 12% 12% 11% PSBC PSBC 9% 34% 47% 29% 29% 29% CMB 14% 12% 17% 8% 7% 8% CMB CMB 38% 33% 16% 11% 11% 9% CNCB 13% 16% 14% 12% 12% 11% CNCB CNCB 47% 40% 21% 10% 7% 7% SPDB 15% 11% 16% 14% 11% 9% SPDB SPDB 53% 31% 67% 18% 13% 9% Industrial 17% 12% 12% 11% 9% 8% Industrial Industrial 15% 18% 7% 19% 10% 4% Hua Xia 14% 14% 13% 12% 11% 9% Hua Xia Hua Xia 27% 55% 16% 15% 13% 12% PAB 21% 19% 17% 11% 10% 10% PAB PAB 67% 48% 20% 12% 13% 8% BONB 23% 22% 19% 15% 15% 14% BONB BONB 50% 63% 52% 11% 14% 14% BONJ 19% 44% 38% 25% 16% 12% BONJ BONJ 67% 65% 57% 13% 13% 12% CQRCB 18% 11% 13% 9% 9% 9% CQRCB CQRCB 55% 38% 61% 17% 17% 16% 全球投资研究 7

8 Exhibit 4: NPAT and revenue forecasts 2017E-2019E (Rmb mn) Net Income Revenue 2017E 2018E 2019E 2017E 2018E 2019E ICBC 283, , , , , ,404 CCB 232, , , , , ,736 BOC 177, , , , , ,553 ABC 208, , , , , ,642 PSBC 43,815 48,843 59, , , ,026 BoCom 63,977 66,839 70, , , ,961 CMB 72,771 80,459 97, , , ,459 CNCB 45,851 49,182 52, , , ,412 SPDB 59,695 68,146 75, , , ,794 Industria 60,514 69,962 76, , , ,336 PAB 23,166 24,449 24, , , ,026 HuaXia 23,722 25,098 25,553 69,792 75,974 80,494 BONB 9,516 11,763 13,664 28,082 32,423 36,722 BONJ 10,344 12,924 14,425 34,464 40,804 46,809 CQRCB 8,933 10,135 11,871 26,399 30,561 34,617 Source: Goldman Sachs Global Investment Research. Exhibit 5: GS vs consensus Net Income Revenue 2016E 2017E 2018E 2016E 2017E 2018E ICBC 0% 16% 24% -2% 6% 10% CCB -2% 0% 4% -4% 0% 3% BOC -11% 4% 7% 2% 3% 6% ABC 0% 16% 24% -2% 6% 10% PSBC 2% 1% -2% -5% -8% -10% BoCom -7% -1% -1% -3% -2% 0% CMB -5% 12% 19% 0% 1% 2% CNCB -4% 7% 8% -3% -1% -1% SPDB 0% 2% 3% -2% -4% -5% Industria 4% 8% 14% -7% -7% -2% PAB -5% -3% 9% -2% -3% -2% HuaXia 6% 15% 12% -1% -3% -6% BONB 2% 4% 11% 0% 3% 2% BONJ 0% 6% 15% 1% 1% 2% CQRCB 3% 10% 15% 4% 8% 11% Source: Bloomberg, Goldman Sachs Global Investment Research 全球投资研究 8

9 Company profiles Company profiles 全球投资研究 9

10 ABC (1288.HK): Strong deposit franchise, undemanding valuation; initiate at Buy (H on CL) Source of opportunity We believe ABC is likely to be a key beneficiary of rate hikes given its superior deposit franchise. ABC H/A shares currently trade at 0.72x/0.75x FY17E P/B, and have traded at a discount to the other big banks since early We believe the rate hike cycle can help narrow its valuation discount, and we also forecast net profit to outperform peers at a 15% CAGR in FY16-19E, vs. Bloomberg consensus at 6% and other big banks average at 9%, underpinned by steady PPOP growth (16% CAGR) and modest RWA expansion (8.2% CAGR). With our 12-m TPs of HK$4.7/Rmb4.2 implying 34%/30% upside, the highest in our H/A banks coverage, we initiate coverage of ABC H/A at Buy (adding the H shares to our CL). Catalyst ABC is our top sector pick as we expect the following catalysts to drive near-term stock price outperformance: 1) continued consensus earnings upgrades, following the NIM upcycle, 2) launch of stricter bank broad credit t regulation and 3) strong dividend payout to be announced at end-march In addition: ABC is likely to be a key beneficiary of rate hikes among the big banks. Under our sensitivity analysis of 15/5/50bps rate hikes for loans/deposits/interbank, we estimate 4.9bps/3.7% rises in NIM/NPAT for ABC (vs +0.1bps/+0.5% averages for covered banks), led by: 1) Strong deposit franchise. ABC s LDR of 65% as of 1H16 is one of the lowest of China banks, making it easier to expand/adjust its loan/asset book and take advantage of higher rates. 2) Low wholesale funding exposure. As a retail/deposit-focused bank, ABC s below-peer reliance on wholesale funding (10% vs. 24% coverage average in 1H16) shields it from elevated costs of interbank funding. 3) Short asset duration. ABC has 23% exposure to short-term net assets (duration <1 year), the highest among big banks, affording it flexibility to either reprice loans to a higher rate or re-invest into higher-yield bonds. ABC s prudent lending practice and asset growth/strong provision reserve shields the bank from regulatory headwinds. With an above-peer NPL coverage ratio of 173% as of 3Q16 (vs. 153% of the Big 4 bank average) and conservative asset growth strategy (NSCA/WMP at 1% of 2017E loans vs. our covered bank average of 15%), ABC is well buffered from asset quality downturn and regulatory tightening, in our view. Valuation Our 12-m target prices of HK$4.7/Rmb4.2 for ABC H/A are derived from 2018E P/PPOP, with our target multiple of 3.2x based on the historical median since They imply 0.96x/0.97x FY17E P/B. We see the shares as compelling trading at 0.72x/0.75x 17E P/B vs. historical medians of 0.93x/0.94x. Key risks 1) Lack of macro improvement near term; 2) Worse-than-expected asset quality, especially in county areas; 3) Stricterthan-expected regulations on asset growth/capital adequacy; 4) Increased competition in county areas. INVESTMENT LIST MEMBERSHIP Asia Pacific Buy list Asia Pacific Conviction Buy list Coverage View: Neutral Key data Current Price (HK$) month price target (HK$) SS Price (Rmb) SS 12 month price target (Rmb) 4.20 Market cap (HK$ mn / US$ mn) 1,133,531.1 / 145,973.0 Foreign ownership (%) -- 12/15 12/16E 12/17E 12/18E EPS (Rmb) EPS growth (%) 0.6 (2.1) SS EPS (Rmb) SS EPS growth (% P/E (X) SS P/E (X) Dividend yield (%) ROE (%) Price performance chart Mar-16 Jun-16 Sep-16 Dec-16 Agricultural Bank of China (H) (L) Hang Seng China Ent. Index (R) 13,000 12,500 12,000 11,500 11,000 10,500 10,000 9,500 9,000 8,500 8,000 Share price performance (%) 3 month 6 month 12 month Absolute Rel. to Hang Seng China Ent. Index Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 3/10/2017 close. 全球投资研究 10

11 Agricultural Bank of China (H): Summary financials Profit model (Rmb mn) 12/15 12/16E 12/17E 12/18E Balance sheet (Rmb mn) 12/15 12/16E 12/17E 12/18E Net interest income 436, , , ,987.8 Gross loans 8,909, ,800, ,634, ,458,330.5 Non-interest income 104, , , ,708.8 NPLs 212, , , ,139.0 Operating revenue 540, , , ,696.5 Loan loss reserves 403, , , ,779.0 Non-interest expense (225,818.0) (198,938.8) (217,061.5) (234,684.7) Total interest earning assets 16,740, ,082, ,301, ,961,708.3 Preprovision operating profit 315, , , ,011.8 Other non-interest earning assets 1,050, ,216, ,878, ,927,847.0 Total provision charge (84,172.0) (87,120.3) (101,037.4) (123,439.8) Total assets 17,791, ,299, ,179, ,889,555.3 Associates Customer deposits 13,538, ,960, ,258, ,349,173.3 Pretax profit 230, , , ,572.0 Total interest-bearing liabilities 15,543, ,854, ,330, ,565,055.8 Tax (50,083.0) (46,370.6) (54,639.5) (60,777.1) Total equity 1,131, ,250, ,404, ,572,575.4 Minorities Net profit 180, , , ,837.9 CAMEL ratios (%) 12/15 12/16E 12/17E 12/18E C: Tier 1 capital ratio Dividends (59,113.0) (54,441.4) (63,977.7) (71,229.6) C: Equity/loans Dividends payout (%) C: Equity/assets A: NPL ratio Earnings growth drivers (%) 12/15 12/16E 12/17E 12/18E A: Loan loss reserves/npls Net interest margin E: Net interest margin Provision charge/total loans E: Non int inc/oper revenues YoY Growth (%) E: Cost-income ratio Customer deposits E: ROAA Loans L: Loan/deposit ratio Net interest income 1.5 (8.5) Fee income Loan portfolio (%) 12/15 12/16E 12/17E 12/18E Non-interest income Commercial & corporate Operating revenue 3.2 (5.0) Mortgages/home loans Operating expenses (0.9) 11.9 (9.1) (8.1) Consumer Preprovision operating profit 4.9 (0.1) Provision charges Valuation (current price) 12/15 12/16E 12/17E 12/18E Pretax profit (0.6) (1.4) P/E basic (X) Net profit 0.6 (2.1) P/B (X) EPS 0.6 (2.1) P/PPOP (X) DPS 0.0 (7.9) Dividend yield (%) Market dimensions 12/15 12/16E 12/17E 12/18E EPS, basic (Rmb) No of branches 23, , , ,670.0 EPS, fully-diluted (Rmb) No of staff (000) Revenues/staff (US$) 171, , , ,444.7 EPS, basic growth (%) Net profit/staff (US$) 57, , , ,916.7 EPS, fully diluted growth (%) 0.6 (2.1) BVPS (Rmb) DuPont analysis (%) 12/15 12/16E 12/17E 12/18E DPS (Rmb) ROE x leverage =ROA % of assets 12/15 12/16E 12/17E 12/18E Net interest income Fee income Non-interest income Operating revenue Operating expenses Preprovision operating profit Loan loss provisions Pretax profits Taxes Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates. 全球投资研究 11

12 Our top sector pick key beneficiary of interbank rate hikes, resilience to regulatory headwinds We initiate ABC H at Buy, adding the stock to our Conviction List with a 12-month target price of HK$4.70, implying 34% upside. We expect ABC to outperform peers with a 15% net profit CAGR in 16-19E, vs. Bloomberg consensus at 6% and other major banks average at 9%, mainly on our more bullish NIM expectations given ABC s stronger deposit franchise/stickier interest cost and lower loan-to-deposit ratio than peers, offering flexibility to adapt to higher loan yields. We also expect ABC s sustainable asset/earnings growth with limited exposure to NSCA/off balance sheet WMP and strong provision reserve to stand out amid potential tightening in bank asset regulation. ABC H is currently trading at one of the lowest 17E P/B multiples of 0.7x among major banks despite the strongest earnings growth outlook, fewest regulatory headwinds and an attractive 6.3% 2017E dividend yield. We expect the following to serve as major catalysts for its stock price outperformance: 1) continued consensus earnings upgrades, following the NIM upcycle, 2) launch of stricter bank broad credit asset regulation and 3) strong dividend payout to be announced in end-march 2017, to serve as major catalysts for its stock price outperformance. Specifically we like ABC in view of two factors: Well positioned amid interbank rate hike(s). Under our sensitivity analysis of 15/5/50bps rate hikes for loans/deposits/interbank, we estimate 4.9bp/3.7% 2017E NIM/NPAT upside for ABC (vs 0.1bps/0.5% for our covered banks in average). Its large NIM upside among peers can be attributed to 1) stickier interest costs thanks to its strong deposit franchise and low reliance on increasingly costly wholesale funding (only 10% vs. a 24% average for coverage banks as of 1H16), 2) interest income upside given ABC s low loan-to-deposit ratio and short asset duration. With one of China s lowest LDR at 65% as of 1H16, it is easy ABC is in a position to expand/adjust its loan/asset book and take advantage of higher rates. Also ABC has 23% exposure to short-term net assets (defined as duration <1 year), the highest among the big banks, allowing it to reprice loans to a higher rate or re-invest into higher-yield bonds at short notice of any market rate increase. Prudent lending practice and asset growth/strong provision reserve shields ABC from regulatory headwinds: ABC is the only big bank with NPL coverage ratio (of 173%) significantly above the 150% regulatory requirement (as well as the 153% average of the Big 4 banks) as of 3Q16. ABC also has the most prudent lending practice, with 62% of its loans collateralized and pledged vs. the Big 4 average of 56% as of 1H16. Combined with its higher provisioning rate, this exposes ABC to less credit cost downside in the event of large default or stricter enforcement of the 150% rule. ABC also has the most conservative asset growth strategy, with NSCA/WMP at only 1% of its 2017E loan vs. our covered banks average of 15%. We believe MPA implementation is likely to greatly reduce the pace of asset growth of banks heavily reliant on NSCA/WMP and add to their capital adequacy pressures, whereas ABC should remain unaffected. Further, its proportion of retail loans (excluding mortgages) to total loans outstanding also ranks first among the Big 4 as of 1H16 (8.7%, vs Big 4 average 7.7%) and ABC is favorably located in the fast-growing county areas of China, in our view allowing it to benefit the most from China s continued urbanization and industrialization. 全球投资研究 12

13 Exhibit 6: We expect ABC to outperform peers in NIM expansion NIM yoy change comparison between ABC and rest of our bank coverage Exhibit 7: thanks to its low LDR and flexibility to adjust loan/asset book 3Q16 LDR comparison among the Big 4 banks ABC Rest of covered banks 80% 75% 73% 78% 76% % % 65% % E 2017E 2018E 2019E 55% ICBC BOC CCB ABC Source: Company data, Goldman Sachs Global Investment Research. Source: Company data Exhibit 8: as well as its strong deposit franchise, with demand deposits to total deposits the highest among major banks 1H16 demand deposit to total deposit ratio comparison among the Big 4 banks Exhibit 9: The company s conservative lending practice, as evidenced by its higher portion of collateralized and pledged loans 1H16 loan breakdown by collateralized, pledged and guaranteed 53% 52% 51% 50% 49% 48% 47% 46% 45% 44% 50% 50% 46% 52% 60% 50% 40% 30% 20% 10% Collateralised Pledged Guaranteed Credit 48% 46% 44% 40% 29% 30% 27% 24% 20% 17% 13% 14% 14% 14% 9% 10% 43% ICBC CCB BOC ABC 0% ICBC CCB BOC ABC Source: Company data Source: Company data 全球投资研究 13

14 Exhibit 10: together with its best-in-class LLR/NPL coverage ratio, should support credit cost downside in the event of large default/tighter regulation 3Q16 LLR/NPL coverage ratio comparison among the Big 4 banks Exhibit 11: ABC s most conservative asset growth strategy and thus lowest reliance on NSCA/WMP should also leave it unaffected by the new MPA regulation framework and its tighter control on NSCA/WMP NSCA/WMP as % of 2017E loan % % 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1% 2% 3% 3% NSCA/WMP as % of 2017E loan 13% 11% 7% 8% 7% 23% 36% 19% 14% 43% 37% 0 ICBC BOC CCB ABC Source: Company data Source: Company data, Goldman Sachs Global Investment Research. 全球投资研究 14

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16 ICBC (1398.HK): Asset quality alleviates regulatory concerns; initiate at Buy Source of opportunity We think ICBC is favorably positioned versus peers, with its better asset quality, stronger capital base to buffer NPLs, and resilient dividend supported by stable earnings growth. More specifically, we forecast a 5% FY16-18E net profit CAGR and sustained dividend payout ratio of c.30% through 16-18E, thanks to ICBC s higher sensitivity to NIM expansion/ steady PPOP growth (13% CAGR in FY16-18E), partially offset by higher credit costs (51bp increase in FY16-18E). We initiate coverage of ICBC at Buy on both H/A shares with 2018E P/PPOP-based 12-m target prices of HK$6.6/Rmb5.9, implying 34%/26% upside, among the highest in our H/A banks coverage. Catalyst 1. Above-peer asset quality, thanks to a clean balance sheet with limited interbank NSCAs and conservative risk management in making loans, showcased through its below sector-average loan growth since 2009 (FY09-16E CAGR at 12% vs. sector aggregate 14%) and 3Q16 NPL formation rate (89bps for ICBC vs. a coverage average of 101 bp). We forecast an average 101bp NPL formation rate in E for ICBC vs. c.115 bp for the sector. 2. Strong capital base and buffer to NPL risk. ICBC has one of the bank sector s highest tier-1 capital adequacy ratio (CAR) in 3Q16 at 13.1%, vs. required CAR at 8.5%. Per our stress test, in 2017E, ICBC can absorb c.19.1% nonperforming asset losses with its capital, LLR and PPOP while meeting regulatory requirements, vs. coverage average of c.12.7% and our estimated China bank sector NPL ratio at only %. 3. Resilient dividend supported by stable earnings growth. We expect ICBC s NIM to expand by 10/9 bps in 2017E/2018E, thanks to its strong deposit franchise and recovering loan demand on the back of a better-than-expected macro economy and a better/earlier-than-expected rebound of corporate capex growth. We forecast this will drive a 5% FY16-18E net income CAGR and help ICBC to sustain its dividend payout ratio at 30%. Key data Current Price (HK$) month price target (HK$) SS Price (Rmb) SS 12 month price target (Rmb) 5.90 Market cap (HK$ mn / US$ mn) 1,749,958.4 / 225,354.7 Foreign ownership (%) -- 12/15 12/16E 12/17E 12/18E EPS (Rmb) EPS growth (%) (1.2) (1.2) SS EPS (Rmb) SS EPS growth (% (1.2) (1.2) P/E (X) SS P/E (X) Dividend yield (%) ROE (%) Tighter regulations would differentiate ICBC from peers. Specifically, regulators have been focusing on reining in WMP and off-balance sheet credit growth, potentially including both in banks broad credit growth calculations. Thanks to its clean balance sheet with limited exposure to WMP/off-balance-sheet assets, we believe ICBC would face smaller headwinds and have more room to grow versus peers. Valuation Our 12-m target prices of HK$6.6/Rmb5.9 for ICBC H/A are derived from 2018E P/PPOP, with a target multiple of 3.7x based on historical median since They imply 0.99x/1.00x FY2017E P/B multiples. We consider both H/A shares undervalued trading at 0.74/0.80x 17E P/B vs. historical median at 1.03x/1.04x. Price performance chart Mar-16 Jun-16 Sep-16 Dec-16 11,000 10,500 10,000 9,500 9,000 8,500 8,000 Key risks 1) Policy tightening and economic slowdown, 2) higher-than-expected provisioning charges to meet regulatory guidance on the LLR/loan ratio. INVESTMENT LIST MEMBERSHIP Asia Pacific Buy list ICBC (H) (L) Hang Seng China Ent. Index (R) Share price performance (%) 3 month 6 month 12 month Absolute 1.2 (3.0) 19.2 Rel. to Hang Seng China Ent. Index (0.8) (3.1) (0.3) Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 3/10/2017 close. Coverage View: Neutral 全球投资研究 16

17 ICBC (H): Summary financials Profit model (Rmb mn) 12/15 12/16E 12/17E 12/18E Balance sheet (Rmb mn) 12/15 12/16E 12/17E 12/18E Net interest income 507, , , ,876.4 Gross loans 11,933, ,005, ,106, ,014,229.8 Non-interest income 160, , , ,756.7 NPLs 179, , , ,566.1 Operating revenue 668, , , ,633.1 Loan loss reserves 280, , , ,103.9 Non-interest expense (220,835.0) (191,255.5) (191,681.9) (203,566.1) Total interest earning assets 21,396, ,505, ,730, ,185,835.7 Preprovision operating profit 447, , , ,067.0 Other non-interest earning assets 813, , , ,893.9 Total provision charge (86,993.0) (95,193.6) (146,374.8) (185,531.8) Total assets 22,209, ,356, ,636, ,126,729.6 Associates 2, , , ,606.2 Customer deposits 16,281, ,356, ,484, ,704,714.2 Pretax profit 363, , , ,141.4 Total interest-bearing liabilities 19,375, ,288, ,317, ,542,543.8 Tax (85,515.0) (79,018.6) (80,956.9) (85,751.4) Total equity 1,721, ,910, ,113, ,330,020.8 Minorities Net profit 274, , , ,655.1 CAMEL ratios (%) 12/15 12/16E 12/17E 12/18E C: Tier 1 capital ratio Dividends 83, , , ,203.1 C: Equity/loans Dividends payout (%) C: Equity/assets A: NPL ratio Earnings growth drivers (%) 12/15 12/16E 12/17E 12/18E A: Loan loss reserves/npls Net interest margin E: Net interest margin Provision charge/total loans E: Non int inc/oper revenues YoY Growth (%) E: Cost-income ratio Customer deposits E: ROAA Loans L: Loan/deposit ratio Net interest income 2.9 (8.1) Fee income Loan portfolio (%) 12/15 12/16E 12/17E 12/18E Non-interest income Commercial & corporate Operating revenue 5.3 (5.0) Mortgages/home loans Operating expenses (1.0) 13.4 (0.2) (6.2) Consumer Preprovision operating profit 7.6 (0.8) Provision charges Valuation (current price) 12/15 12/16E 12/17E 12/18E Pretax profit 0.4 (3.3) P/E basic (X) Net profit (0.4) (1.2) P/B (X) EPS (1.2) (1.2) P/PPOP (X) DPS (9.8) (2.1) Dividend yield (%) Market dimensions 12/15 12/16E 12/17E 12/18E EPS, basic (Rmb) No of branches 17, EPS, fully-diluted (Rmb) No of staff (000) Revenues/staff (US$) 228,169.1 NM NM NM EPS, basic growth (%) (1.2) (1.2) Net profit/staff (US$) 93,760.7 NM NM NM EPS, fully diluted growth (%) (1.2) (1.2) BVPS (Rmb) DuPont analysis (%) 12/15 12/16E 12/17E 12/18E DPS (Rmb) ROE x leverage =ROA % of assets 12/15 12/16E 12/17E 12/18E Net interest income Fee income Non-interest income Operating revenue Operating expenses Preprovision operating profit Loan loss provisions Pretax profits Taxes Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates. 全球投资研究 17

18 CCB ( SS): NIM upside with strong asset quality; initiate A-shares at Buy Source of opportunity We initiate coverage of CCB A-shares at Buy, with a 2018E P/PPOP-based 12-m target price of Rmb7.2, implying 23% upside, among the highest in our A-share coverage. We like the company given: 1) its above-peer ROE and PPOP ROA, thanks to its strong funding franchise, high NIM among big banks, solid cost controls evidenced by a below-peer cost/income ratio, and relatively conservative lending policy; and 2) strong capital buffer with a tier 1 CAR of 13.24% (1H16), reducing earnings downside from potential NPLs. Its strong returns (2.2% PPOP ROA as of FY17E vs. coverage average of 2.0%) also allow CCB to generate sufficient capital organically to fund 8% loan CAGR over 16-18E while supporting a 30% dividend payout ratio. Catalyst 1) Better positioned to benefit from de facto rate hikes, thanks to 1) stickier funding costs given its traditionally strong deposit franchise, and 2) greater interest income rate upside with its loan repricing bargaining power. We accordingly expect CCB s NIM to expand by 11/9 bps in 17/18E. 2) Above-peer asset quality. We also like the bank s prudence in conservatively growing its balance sheet (11% CAGR over FY09-16E vs. a sector aggregate of 14%) and low exposure to off-balance sheet/other high risk assets. As a result, CCB s 3Q16 NPL formation rate was 78bps vs. the coverage average of 101 bps. Going forward, we expect its strong asset quality to continue placing less pressure on the bottom line than on peers we forecast an average c. 96bps NPL formation rate in E for CCB vs. the c.115 bps sector average. CCB has the highest cushioning against potential NPAs, and its above-peer liquidity coverage ratio (113% LCR as of 3Q16) also provides CCB with the flexibility to tackle potentially tighter liquidity regulations, in our view. Valuation Our 12-m target price of Rmb7.2 for CCB A is derived from 2018E P/PPOP, with our target multiple of 3.6x based on the historical median since It implies a 1.04x FY17E P/B multiple. We believe valuation is attractive with CCB A currently trading at 0.85x 17E P/B vs. historical median at 1.01x. Key risks 1) Policy tightening and economic slowdown, 2) weaker-than-expected asset quality and thus higher-than-expected credit costs. Upside risk (for H-share): Better-than-expected asset quality. Impact on related securities We initiate CCB H-shares at Neutral relative to our H-share coverage with a 12-month target price of HK$7.9, based on a historical median 3.5x 2018E P/PPOP target multiple. Our TP implies 30% upside, close to the average of 27% for our H- share coverage. INVESTMENT LIST MEMBERSHIP Asia Pacific Buy list Key data Current Price (Rmb) month price target (Rmb) HK Price (HK$) HK 12 month price target (HK$) 7.90 Market cap (Rmb mn / US$ mn) 1,470,064.7 / 212,547.7 Foreign ownership (%) -- 12/15 12/16E 12/17E 12/18E EPS (Rmb) EPS growth (%) 0.1 (2.7) HK EPS (Rmb) HK EPS growth (%) 0.1 (2.7) P/E (X) HK P/E (X) Dividend yield (%) ROE (%) Price performance chart Mar-16 Jun-16 Sep-16 Dec-16 China Construction Bank (A) (L) Shanghai - Shenzhen 300 (R) 4,000 3,900 3,800 3,700 3,600 3,500 3,400 3,300 3,200 3,100 3,000 Share price performance (%) 3 month 6 month 12 month Absolute Rel. to Shanghai - Shenzhen Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 3/10/2017 close. Coverage View: Neutral 全球投资研究 18

19 China Construction Bank (A): Summary financials Profit model (Rmb mn) 12/15 12/16E 12/17E 12/18E Balance sheet (Rmb mn) 12/15 12/16E 12/17E 12/18E Net interest income 457, , , ,501.5 Gross loans 10,485, ,493, ,495, ,346,129.1 Non-interest income 128, , , ,642.2 NPLs 165, , , ,248.1 Operating revenue 586, , , ,143.7 Loan loss reserves 250, , , ,668.5 Non-interest expense (194,826.0) (166,677.8) (166,953.3) (179,302.7) Total interest earning assets 15,480, ,442, ,500, ,544,509.5 Preprovision operating profit 391, , , ,841.0 Other non-interest earning assets 2,869, ,218, ,382, ,633,933.4 Total provision charge (93,639.0) (99,795.3) (142,171.7) (167,293.5) Total assets 18,349, ,660, ,883, ,178,442.9 Associates Customer deposits 13,668, ,638, ,634, ,603,786.7 Pretax profit 298, , , ,679.5 Total interest-bearing liabilities 16,155, ,152, ,088, ,061,152.9 Tax (69,611.0) (64,007.5) (72,534.9) (79,209.0) Total equity 1,425, ,574, ,740, ,924,870.2 Minorities Net profit 228, , , ,034.5 CAMEL ratios (%) 12/15 12/16E 12/17E 12/18E C: Tier 1 capital ratio Dividends (68,503.0) (66,609.2) (69,652.8) (76,210.4) C: Equity/loans Dividends payout (%) C: Equity/assets A: NPL ratio Earnings growth drivers (%) 12/15 12/16E 12/17E 12/18E A: Loan loss reserves/npls Net interest margin E: Net interest margin Provision charge/total loans E: Non int inc/oper revenues YoY Growth (%) E: Cost-income ratio Customer deposits 6.1 (100.0) NM NM E: ROAA Loans L: Loan/deposit ratio Net interest income 4.7 (8.1) Fee income Loan portfolio (%) 12/15 12/16E 12/17E 12/18E Non-interest income Commercial & corporate Operating revenue 5.4 (5.1) Mortgages/home loans Operating expenses (0.2) (7.4) Consumer Preprovision operating profit 8.6 (0.4) Provision charges Valuation (current price) 12/15 12/16E 12/17E 12/18E Pretax profit (0.2) (2.6) P/E basic (X) Net profit 0.1 (2.7) P/B (X) EPS 0.1 (2.7) P/PPOP (X) DPS (9.0) (2.8) Dividend yield (%) Market dimensions 12/15 12/16E 12/17E 12/18E EPS, basic (Rmb) No of branches 14, , , ,945.0 EPS, fully-diluted (Rmb) No of staff (000) Revenues/staff (US$) 252, , , ,932.6 EPS, basic growth (%) 0.1 (1.1) Net profit/staff (US$) 98, , , ,488.1 EPS, fully diluted growth (%) 0.1 (2.7) BVPS (Rmb) DuPont analysis (%) 12/15 12/16E 12/17E 12/18E DPS (Rmb) ROE x leverage =ROA % of assets 12/15 12/16E 12/17E 12/18E Net interest income Fee income Non-interest income Operating revenue Operating expenses Preprovision operating profit Loan loss provisions Pretax profits Taxes Note: Net Income in the table does not include preferred dividend. Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates. 全球投资研究 19

20 BOC ( SS): Abundant capital limits downside, NIM driving upside; initiate A at Buy Source of opportunity We initiate coverage of BOC A-shares at Buy with a 12-month target price of Rmb4.7, implying 29% upside, second highest in our A-share coverage. We take a positive view of BOC as (1) we believe it will benefit more than peers in the current cycle of rising rates given a low exposure to interbank funding, (2) it has a strong capital base with 3Q16 reported tier I CAR at 12.21%, and (3) it has a more streamlined business post Nanyang Commercial Bank sale in We expect BOC to grow NPAT by -9%/18%/8% in 2016E/17E/18E, driven by 9%/7%/10% PPOP growth and flat credit costs. Catalyst 1. NIM expansion on stable funding costs: At 13% of total liabilities, BOC has the 4th lowest exposure to funding from interbank and Negotiable Certificates of Deposit (NCDs) within our coverage as of 1H16. Under our sensitivity analysis of a 75/50bp rate hike for interbank/ncd (ref: both rates have climbed by over 130bp since 1H16), we estimate a 7.5bp rise in funding cost (vs a 14.5bp of covered banks average). However, we expect asset yield to increase by 16.7bp (similar to peers average 16.9bp) due to asset repricing. Overall, we forecast 21bp NIM expansion from 2016E to 2019E, vs a 14bp sector average. 2. Low exposure to NSCA investments and repo assets (1% of total assets, vs average 15% for our covered banks as of 1H16), which positions BOC well against forthcoming headwinds from stricter regulatory scrutiny under the lookthrough policy of the Macro Prudential Assessment (MPA) framework and potential coordinated asset management regulations (for details, see China: Banks: Breathing Space). Valuation Our 12-month target price of Rmb4.7 is derived from 2018E P/PPOP with our target multiple of 3.7x based on the historical median since Our TP implies 0.98x/0.90x 2017E/18E P/B multiples. With 29% upside vs. an average 15% for A-share banks, we consider BOC A undervalued trading at 3.2x P/PPOP vs. historical average of 5.0x and peer average of 3.2x, as well as 17-18E P/B multiples of 0.76x/0.69x vs. historical median of 0.89x. Key data Current Price (Rmb) month price target (Rmb) HK Price (HK$) HK 12 month price target (HK$) 4.50 Market cap (Rmb mn / US$ mn) 1,068,628.4 / 154,506.5 Foreign ownership (%) -- 12/15 12/16E 12/17E 12/18E EPS (Rmb) EPS growth (%) (1.4) (4.4) HK EPS (Rmb) HK EPS growth (%) (1.4) (4.4) P/E (X) HK P/E (X) Dividend yield (%) ROE (%) Price performance chart ,700 3,600 Key risks Lower interest rates; worse-than-expected asset quality; macro slowdown. Upside risk (for H share): Better-than-expected asset quality ,500 3,400 3,300 3,200 Impact on related securities We initiate BOC H at Neutral relative to H-share coverage with a 12-month target price of HK$4.5, based on a 3.2x 2018E P/PPOP target multiple. We see relatively moderate upside (19%) vs H-share peers average of 27%. INVESTMENT LIST MEMBERSHIP Asia Pacific Buy list Coverage View: Neutral Mar-16 Jun-16 Sep-16 Dec-16 Bank of China (A) (L) Shanghai - Shenzhen 300 (R) 3,100 3,000 Share price performance (%) 3 month 6 month 12 month Absolute Rel. to Shanghai - Shenzhen (4.8) Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 3/10/2017 close. 全球投资研究 20

21 Bank of China (A): Summary financials Profit model (Rmb mn) 12/15 12/16E 12/17E 12/18E Balance sheet (Rmb mn) 12/15 12/16E 12/17E 12/18E Net interest income 328, , , ,952.4 Gross loans 9,135, ,109, ,033, ,906,938.9 Non-interest income 145, , , ,929.7 NPLs 130, , , ,639.8 Operating revenue 473, , , ,882.0 Loan loss reserves 200, , , ,979.2 Non-interest expense (185,401.0) (185,887.4) (193,344.8) (212,962.3) Total interest earning assets 15,898, ,134, ,380, ,548,792.1 Preprovision operating profit 288, , , ,919.7 Other non-interest earning assets 916, ,015, ,136, ,288,316.8 Total provision charge (59,274.0) (100,375.2) (88,931.4) (103,441.7) Total assets 16,815, ,150, ,517, ,837,108.9 Associates 2, , , ,285.8 Customer deposits 11,729, ,707, ,645, ,542,147.9 Pretax profit 231, , , ,763.8 Total interest-bearing liabilities 14,670, ,856, ,054, ,190,468.0 Tax (52,154.0) (41,431.9) (55,829.3) (60,246.8) Total equity 1,257, ,364, ,494, ,631,496.7 Minorities (8,572.0) (17,973.2) (8,438.8) (9,868.7) Net profit 165, , , ,188.2 CAMEL ratios (%) 12/15 12/16E 12/17E 12/18E C: Tier 1 capital ratio Dividends (55,933.7) (46,560.8) (55,158.6) (59,294.5) C: Equity/loans Dividends payout (%) C: Equity/assets A: NPL ratio Earnings growth drivers (%) 12/15 12/16E 12/17E 12/18E A: Loan loss reserves/npls Net interest margin E: Net interest margin Provision charge/total loans E: Non int inc/oper revenues YoY Growth (%) E: Cost-income ratio Customer deposits E: ROAA Loans L: Loan/deposit ratio Net interest income 2.4 (2.7) Fee income Loan portfolio (%) 12/15 12/16E 12/17E 12/18E Non-interest income (10.2) 8.8 Commercial & corporate Operating revenue Mortgages/home loans Operating expenses (4.3) (0.3) (4.0) (10.1) Consumer Preprovision operating profit Provision charges (11.4) 16.3 Valuation (current price) 12/15 12/16E 12/17E 12/18E Pretax profit 0.0 (7.3) P/E basic (X) Net profit (2.2) (9.3) P/B (X) EPS (1.4) (4.4) P/PPOP (X) DPS 1.6 (16.8) Dividend yield (%) Market dimensions 12/15 12/16E 12/17E 12/18E EPS, basic (Rmb) No of branches 11, , , ,633.0 EPS, fully-diluted (Rmb) No of staff (000) Revenues/staff (US$) 243, , , ,819.1 EPS, basic growth (%) (1.4) (4.4) Net profit/staff (US$) 85, , , ,158.0 EPS, fully diluted growth (%) (4.1) (9.3) BVPS (Rmb) DuPont analysis (%) 12/15 12/16E 12/17E 12/18E DPS (Rmb) ROE x leverage =ROA % of assets 12/15 12/16E 12/17E 12/18E Net interest income Fee income Non-interest income Operating revenue Operating expenses Preprovision operating profit Loan loss provisions Pretax profits Taxes Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates. 全球投资研究 21