Investment Value Study Of Industrial And Commercial Bank Of China Ltd.

By analysing the environment of the chinese macroscopic economics and the sector of chinese commercial banks, analysing the situation of Industrial and Commercial Bank of China running, evaluating the price of the equities of ICBC by using the Dividend Discount Model and the Capital Asset Pricing Model, this article research the equities value of ICBC. The purpose of my job is to provide usable material to the investors and the research people interested in the equity of ICBC.In past 30 years, the chinese economy has developed rapidly. The average development rate per year is 14.9%.In the future, the Demographic Window of Opportunity of China will continue for a long period until 2030;The tendency of the foreign capital keeping on pouring in China will not terminate recently; The GDP per capita of Chin more than 1000 US dollar is a signal that chinese economy has been undergoing a flying period; The china system reformation will keep on releasing motive power to push the economy forward. All factors mentioned above are helpful to the chinese economy developing rapidly for a long time in the future.Almost all business of chinese commercial banks, except enterprise loans, have been experiencing a permanent period, while some of them even been experiencing thanks period. Because chinese economy will increase rapidly for a long time in the future, the business of loan of the chinese commercial banks will also increase. By the way, the inter-business of chinese commercial banks developes more rapidly. During recent several years, while the chinese economy experiencing increasing period, the quality of capital of the chinese commercial banks has been improved. The capital adequacy ratio of most chinese commercial banks reach or are above 8%.The nonperforming loans ratio of the chinese commercial banks decreased continuously year by year. The influence of the chinese future monetary policy depends on the chinese currency exchange policy, changes of the chinese reserve ratio and the intention of the chinese center bank.ICBC is the largest one of the chinese commercial banks, having leading position in the amount of the assets, the number of the outlets and the branch institutes, the area of the major commercial bank business. As well, the inter-business of this bank has increased rapidly. However, the market share of deposit and loan of it decreased continuously year by year. I finally forecast that the earning per equity of the bank in 2008, 2009 would be 0.409 and 0.493 yuan respectively, by analysing the financial statement and based on some hypothesis. The price equity ratio based on 2008 earning is 12.05, and based on 2009 is 10.The theoretical price of it's equity is 6.55 yuan, calculated by using the Dividend Discount Model and the Capital Asset Pricing Model. Now the market price of the equities is much lower than the theoretical price. So it is possible to get superior returns by buying the stocks and holding them for a certain period.