In terms of total assets, Bank of Communications is the fifth largest bank in China after the four state-owned banks. As the "leading goose" of domestic commercial banks, Bank of Communications has obvious advantages in the industry: First, the company's assets are of good quality. Although bad debts and bad debts have become a major drawback of China's banking industry, Bank of Communications is not worried in this respect. By the end of last year, the NPL ratio of Bank of Communications was only 2.9 1%, far lower than the NPL ratios of China joint-stock commercial banks and the four major state-owned banks, which were 4.9% and 15.6% respectively. Bank of Communications' capital adequacy ratio of 9.72% ranks among the best among mainland commercial banks. Good asset quality provides a solid foundation for the company's business expansion and sustainable development. Secondly, the company has a wide business structure and a good customer base. Bank of Communications is one of the oldest commercial banks in China, and has established a widely distributed customer base in China. It has more than 500,000 corporate and institutional customers, most of whom are located in the Yangtze River Delta, the Bohai Economic Circle and the Pearl River Delta, which are the most economically developed areas in China. In addition to its extensive distribution network in China, Bank of Communications also has branches in major financial centers in the world, such as Hongkong, new york, Tokyo and Singapore. In the future, the company will have broad development space. Third, the company has a trustworthy management structure. Bank of Communications is the first commercial bank in China to design and implement a relatively advanced asset-liability management system. The company's senior management team has an average of 20 years of banking experience, which helps the company to be invincible in the complex industry competition. Strategic shareholding in HSBC can bring rich international banking experience and professional knowledge to the company, which will help the company to further improve its business operation and corporate governance. As can be seen from the financial statements disclosed in the company's prospectus, among the three main businesses of corporate banking, retail banking and treasury business, corporate banking accounted for 70.0%, 68. 1% and 63.3% of the revenue in the past three years respectively; The steady growth of this business can provide an effective guarantee for the company's profit stability. Retail banking and treasury business have also achieved rapid growth in recent years, and the proportion of income is also increasing year by year. All these show that the company's business development momentum is good. In terms of profitability, the net profit of Bank of Communications in the past three years was 4.429 billion yuan, 4.376 billion yuan and 65.438+60.4 billion yuan respectively; The sharp drop in profits last year was due to related deferred taxes. According to the forecast in the prospectus, the company expects to achieve a net profit of not less than 7.874 billion yuan and earnings per share of 0. 18 yuan by the end of this year. From the market point of view, Bank of Communications also has unique market advantages: on the one hand, Bank of Communications is the first H-share listed in Hong Kong. Before the listing of Bank of Communications, no mainland bank listed directly in Hong Kong. 1 10 H company covers most major industries in the mainland, such as energy, petrochemicals, electric power, highways, steel, automobiles, communications, medicine, metals, insurance, retail, etc., but it provides an excellent window and way for international capital to invest in high-quality China enterprises and share the fruits of China's rapid economic development. However, the lack of banking enterprises has been a major shortcoming of the H-share market for many years. The listing of Bank of Communications made up for this gap. Generally speaking, most leading enterprises in important industries in the Mainland are listed in Hong Kong first, and then return to the Mainland to issue A shares. Therefore, Bank of Communications, as the first dominant enterprise in the mainland banking industry to be listed in Hong Kong, is bound to receive more attention from the market. On the other hand, Bank of Communications acquired the strategic equity of HSBC. In August last year, HSBC Holdings spent $65.438+74.6 million to acquire 7.775 billion shares of Bank of Communications, and the shareholding ratio of 65.438+09.9% approached the upper limit of allowing a single foreign bank to hold 20% shares of domestic commercial banks. Before the IPO of Bank of Communications, the management of HSBC Holdings has made it clear that it will subscribe for 1/5 new shares to ensure that its shareholding ratio and the status of the second largest shareholder remain unchanged, which is enough to show HSBC's full confidence in Bank of Communications. At the same time, HSBC promised not to sell its shares in Bank of Communications before the end of August 2008; If approved by the mainland regulatory authorities, HSBC will continue to increase its shareholding ratio to as high as 40%. In addition, as an outstanding representative of domestic commercial banks, Bank of Communications will definitely be heavily held by foreign investors in JPMorgan Chase after listing. In the H-share market, the trend of foreign ownership has always had a good demonstration effect on other investors. Foreign ownership will play an important role in improving the valuation of Bank of Communications. Risk factors can not be ignored, nor can the risk of Bank of Communications. From the business point of view, the growth of Bank of Communications enterprises and retail loan business is mainly concentrated in economic zones with high per capita GDP, such as Yangtze River Delta, Bohai Economic Circle and Pearl River Delta. If there is a major economic recession in these areas, the financial situation and operating performance of Bank of Communications will be greatly affected. At the same time, Bank of Communications' loans are mainly concentrated in manufacturing, trade and real estate, and any decline in these industries will also have an important negative impact on Bank of Communications. The current business structure of Bank of Communications still lacks the stability similar to that of HSBC. From the valuation point of view, based on the expected profit in 2005 and the final issue price of HK$ 2.5 in the prospectus of Bank of Communications, the P/E ratio of the company's IPO can be calculated as 14.7 times. This P/E ratio is related to its strategic investors, Hong Kong's largest banking stock and blue-chip HSBC Holdings (0005. Hong Kong), and the market images of Bank of Communications and HSBC Holdings are obviously not the same. This means that Bank of Communications has no obvious valuation advantage compared with the banking stocks listed in Hong Kong. Moreover, Bank of Communications' capital adequacy ratio of 9.7% is much higher than that of domestic peers, but it is the lowest compared with the banking stocks listed in Hong Kong. Relevant information shows that China Bank and China Construction Bank will also conduct overseas IPO activities at the end of this year or early next year. This means that in the next six months or so, international investors who prefer Chinese banks will have more investment options. By then, it is unknown whether the funds that have already bought shares of Bank of Communications during IPO will be transferred to these banking enterprises. After all, the attractiveness brought by the price of Bank of Communications is relatively limited. From the experience, there is a positive correlation between the subscription rate of new shares in Hong Kong stock market during IPO and the final IPO price and the performance on the first day after listing. Therefore, Bank of Communications should have a good performance after listing. However, this may also be a disaster for its longer-term stock price performance. The performance of large mainland enterprises such as China Life Insurance in IPO and after listing can serve as a warning. In addition, the reason why the IPO of Bank of Communications is sought after and highly subscribed is not unrelated to the low entry threshold and the low proportion of public offering in the IPO scale. It is also strange why the IPO activities of Bank of Communications are in such a situation. Bank of Communications has great value advantages.