# Industrial and Commercial Bank of China (HKEX:1398)

As of Sun 8 Nov 2026 12:00 UTC (weekly snapshot). Full report: https://standard-equity.report/HKEX/1398

Price HK$7.95 (HKD), market cap HK$3.362T, Financials - Banks - Diversified.

## Valuation

- SE Reference Value (expected value, DCF): HK$27.91 (central 50% range HK$25.70 to HK$30.77), +251% against the price; range width narrow
- SE Grade: 1 of 3 (Value 3, Quality 1, Moat 2)
- Consensus Rating: Buy (Strong buy 9, Buy 6, Hold 2, Sell 0, Strong sell 0)
- Consensus Price (mean): HK$8.10, +2% against the price

## Key metrics

Financials in CNY. Peer percentile: 100 = best in the peer group.

| Metric | Now | 5Y median | 10Y median | Peers |
|---|---|---|---|---|
| Revenue | ¥857.6B | CAGR 0.0% | CAGR 2.5% | P93 |
| Revenue growth | 7.5% | -2.2% | 1.9% | P17 |
| NIM | 1.3% | 1.6% | 2.1% | P40 |
| Efficiency ratio | 29.1% | 29.1% | 29.4% | P100 |
| Net margin | 43.4% | 43.3% | 40.4% | P97 |
| Net interest income | ¥680.8B | CAGR -0.4% | CAGR 3.4% | - |
| Net interest income growth (FY2025) | -0.4% | -0.4% | 2.3% | P23 |
| ROTE | 8.8% | 9.7% | 10.8% | P10 |
| ROE | 9.0% | 10.0% | 11.3% | P13 |
| ROA | 0.6% | 0.8% | 0.9% | P47 |
| EPS | ¥1.00 | CAGR 3.0% | CAGR 3.0% | - |
| EPS growth | 7.0% | 1.7% | 2.2% | P30 |
| Book value per share | ¥11.40 | CAGR 7.4% | CAGR 9.1% | - |
| Tangible book value per share | ¥11.40 | CAGR 7.4% | CAGR 9.2% | - |
| Dividend per share | ¥0.31 | CAGR 3.1% | CAGR 3.2% | - |
| Dividend yield | 4.6% | 7.5% | 6.1% | P97 |
| Payout ratio (FY2025) | 31.0% | 31.3% | 30.9% | P37 |
| Diluted shares | 356,406.3M | - | - | P17 |
| Buyback yield | 1.0% | - | - | P17 |
| Equity/assets | 7.6% | 8.4% | 8.5% | P80 |
| Assets | ¥57.82T | CAGR 9.9% | CAGR 9.2% | P100 |
| Long-term debt | ¥3.008T | CAGR 21.9% | CAGR 22.0% | P83 |

## Company Note (Q3 2026)

Written by AI from the data above.

**ICBC's third quarter showed a margin** that has stopped sliding. Revenue rose 9.5% from a year earlier and diluted EPS climbed 11.1%, helped by three things management named. A deposit self-discipline initiative cut liability costs, loan repricing has run its course with new loan rates stabilising, and equity and fund investment income lifted other non-interest income. Earnings power looks underappreciated: SE fair value of HK$28 is 251.8% above the price.

**Management expects net interest margin** to find a bottom this year if policy rates hold, then narrow slightly in 2027. Full-year loan growth is guided at around 6%, above national GDP growth. The bank also said attributable net profit growth of 3.3% in 2026 would fully offset dilution from its CNY 100 billion private placement, which goes to priority sectors and international expansion. Analysts pressed on the margin outlook and whether bond growth keeps outpacing credit. Consensus has EPS growth slowing into 2027, matching the guided margin squeeze.

**Analysts look for FY2026 EPS growth** of 4.7%, which clears management's 3.3% dilution threshold, on revenue growth of 9.1%. For FY2027 they see EPS growth easing to 3.7%, consistent with the slight margin narrowing the bank flagged. The stock trades near six times forward earnings, so even low single-digit growth sustains a high earnings yield. One caution: earnings beat estimates in only 1 of the last 8 quarters, so the third-quarter beat breaks a pattern rather than extending one.

**Profitability per unit of revenue has improved** while returns on capital have not. Net margin moved from 41.1% in FY2022 to 44.5% in FY2025 and now sits at 43.4%, in line with its five-year median. That ranks near the top of the 31 similarly sized diversified banks. The efficiency ratio worsened over the same span, from 27.9% to 30.3%. Return on tangible equity is in line with its median but fell from 10.4% to 8.7% over three years, near the bottom of peers. Thin return on assets and share count growth hold back Quality.

**SE fair value** of HK$28 is 251.8% above the price, with high confidence. Yet the P/E of 6.8x is 36% above its 10-year own median of 5.0x. The analyst target of HK$8.10 sits 1.9% above the price, so the Street expects far less re-rating than the model. For the price to hold and the gap to close, results must land near the model's base case, with the margin bottoming as guided. FY2026 profit growth falling short of 3.3% would show dilution is not being covered.

**The SE Score** is 1 of 3. Quality earns one star: a 9% ROE clears a 2.8% cost of equity, but return on assets of 0.6% is thin for a bank this size. Moat earns two stars, as book value per share grew in 9 of the last 9 years. Value earns three stars because SE fair value sits 251.8% above the price, and that lifted the overall score one notch. The five-year return over the hurdle does not rank in the top 10% of companies, so a rank cap lowered the score from two stars.

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Weekly snapshot, not live data. For information only, not investment advice. Methodology: https://standard-equity.report/methodology