ICBC (SEHK:1398) Valuation: Assessing Impact of Fresh RMB40 Billion AT1 Capital Raise on Growth Prospects

Industrial and Commercial Bank of China (SEHK:1398) just completed a major capital raising, issuing RMB40 billion in undated Additional Tier 1 Capital Bonds. This move increases the bank’s financial cushion for future expansion.

See our latest analysis for Industrial and Commercial Bank of China.

ICBC’s recent surge stands out, with its share price jumping 16.25% over the past month and 35.67% year-to-date, reflecting renewed optimism as capital strength and dividend announcements boost sentiment. For investors who stayed the course, the total shareholder return over the past year reached an impressive 50.45%, with momentum clearly building behind the stock.

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With share prices rising sharply and new capital now on hand, the key question for investors is whether ICBC remains undervalued or if recent gains mean the market is already factoring in continued growth potential.

Most Popular Narrative: 6.8% Undervalued

With the recent close at HK$6.58 and a widely followed narrative fair value of HK$7.06, analysts are assigning a modest premium to current market pricing, highlighting continued optimism for future performance.

Market leadership and scale, combined with a solid capital adequacy ratio (19.54%) and robust risk control measures, have preserved asset quality (NPL ratio at 1.33%, provision coverage at 217.71%), enabling reliable earnings and the ability to maintain above-sector-average dividend yields. These factors may be underappreciated in the current valuation.

Read the complete narrative.

Want to know why this fair value stands taller than today’s price? The secret mix involves powerful capital deployment, resilient risk management, and ambitious profit assumptions that defy the sector norm. How do these numbers combine to drive the narrative’s optimism? Uncover which financial levers the narrative claims will fuel the next leg up for ICBC.

Result: Fair Value of $7.06 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent pressure on net interest margins and heavy exposure to policy-driven lending could challenge the long-term sustainability of ICBC’s current momentum.

Find out about the key risks to this Industrial and Commercial Bank of China narrative.

Build Your Own Industrial and Commercial Bank of China Narrative

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A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Industrial and Commercial Bank of China.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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