China Banks: Deep value despite the NPL challenge
Report by Galliano's Financials Research
In Victor Galliano’s China banks screen, he focuses on the credit quality headwinds going forward, as well as the returns trends that can absorb potentially worsening cost of risk charges. While China bank shares continue to be poor performers, Victor sees selective contrarian buy opportunities for those banks with deeply discounted valuations and strong balance sheets including credit quality metrics. He upgrades Ping An Bank to Buy and continues to favour Industrial Bank and CCB, although Minsheng remains a Sell.