Event
According to 2008 annual report that the company issued today, it realized net profit of Rmb65.073bn (+4.93% yoy), and EPS of Rmb0.25.
Our Analysis and Estimation
Regional combination is likely to smooth the profit.
Its long-term holding of portfolio is favorable to resist the margin shrinkage due to interest rate cut.
Provision for US dollar assets is sufficient.
Non-performing loan rate and non-performing balance of credit assets keep declining.
Investment Suggestion
“Recommended” rating is given due to the following reasons including: 1) Its investment risks have been substantially eased and asset impairment pressure releases; 2) Its overseas business will be largely improved compared with that of the previous year, which will contribute much more to its operating profit; and 3) Loss of exchange sharply lessened under current situation that exchange rate of RMB and US dollar maintains steady.