3
Banks
China
5 February 2007
abc
Investment summary 2
Sector Outlook 2007 4
Margins expand… 5
Loan growth remains strong… 6
Asset quality unlikely to threaten earnings… 7
Fees…becoming a new treasure? 8
More to come… 9
Higher forecasts 11
Earnings…up, up, up 11
Upgrade earnings on fee income and tax rate 12
Price-to-book valuation 13
Regional comparisons 13
Valuation 13
A share multiples 14
Higher target prices 14
Ratings 14
Company Profiles 17
China Merchants Bank 19
China Construction Bank 25
Bank of China 30
Industrial and Commercial Bank of China 35
Bank of Communications 40
Disclosure appendix 44
Disclaimer 49