http://www.sse.com.cn/cs/zhs/scfw/gg/ssgs/2007-10-23/600036_2007_3.pdf
EPS has increase 128%. The A-share announcement is more detail
From the announment , the following are key observations
-benefit from increasing interest rate spread by China central bank. From June to Sep, The net interest income is already 58% of 1H
-cost ratio has increased by 1.3 %. Still acceptable as the growth is large and there will be larger investment and remuneration for management/staff'
-loan loss provision is dropped below 9% but we have not take into account for seasonal factor.
-fees and commission revenue grows even faster as a result of active A share market
- the increase of req. reserve ratio would have little impact as the deposit increase is large.
- Further interest rate increase would be an edge for China Banks as the deposit rate is based on simple interest and loan is on compound basis.
-expect EPS for 07 may be over 1 dollar and trading at 37x PE.
Risk
- very high PB ratio. Even BV is 5 for 2007. The P/BV is still at 7-8x
- skeptical of very high growth rate. Anticipated that the non-interest income will be volatile. Still cant figure out it 's core economic franchise.
http://spreadsheets.google.com/pub?key=pR1x8WS8Q0p1y1RVyo6F2VA
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