UB#ICBC RC2807A(58321.HK)

LUXSHARE-ICT plans to apply for a total comprehensive credit limit of RMB 65.5 billion from 7 banks, including the Shenzhen Bao'an Branch of Industrial and Commercial Bank of China Limited and the Shenzhen Branch of the Export-Import Bank of China

The three major A-share indices of Shanghai and Shenzhen fell by 1% to 1.9% in the first half of the day, with oil and gold stocks showing weakness, while domestic bank stocks rose against the trend

Today, the three major indices of A-shares opened lower and continued to decline, with the Shanghai Composite Index falling 1% to 4,059 points, the Shenzhen Component Index down 1.8%, and the ChiNext Index down 1.9%. Domestic bank stocks rose against the trend, with Industrial and Commercial Bank of China and China Construction Bank increasing by 0.7% and 1.2%, respectively. Oil and gold stocks generally fell, with the three major oil companies and gold-related stocks declining between 1.1% and 6.8%. The central parity rate of the RMB against the USD was adjusted to 6.9570. Today, the People's Bank of China conducted reverse repurchase operations, with a net injection of 64.5 billion yuan

Hong Kong ADRs Experience Decline with Major Blue-Chip Losses

Hong Kong's American Depositary Receipts (ADRs) mostly continued to decline. According to RTHK, several blue-chip ADRs fell between 1% and over 2%. Meituan and Alibaba experienced significant drops, both declining by more than 2%, with their Hong Kong dollar equivalents at 90.3 and 155.4, respectively. Tencent, Xiaomi, Hong Kong Exchanges and Clearing, AIA, Ping An Insurance, Industrial and Commercial Bank of China, and Bank of China ADRs all decreased by over 1%. In contrast, HSBC's ADR rose by 0.5%, equivalent to 139.7 in Hong Kong dollars.

UBS: Constructive view on domestic banks with over 5% dividend yield, prefers ICBC, CCB, XCB, and BOC

UBS released a research report, stating that China will issue approximately 500 billion yuan of special government bonds to supplement the capital of ICBC, ABC, and large insurance companies. The capital injection plan is expected to be announced as early as the first quarter, which may lead to bank dividend distributions being advanced to late April and early May. UBS expects that the core Tier 1 capital adequacy ratio of ICBC and ABC will improve, but after the capital injection, ABC's core Tier 1 capital adequacy ratio will still be below 12%. The capital injection will dilute the earnings per share and dividends per share of the two banks by approximately 4% and 8%, respectively

ICBC and ABC are reported to receive central government capital injection. Goldman Sachs expects a maximum reduction of 7% in earnings per share, or will try to maintain dividends

The Ministry of Finance plans to inject capital into ICBC and ABC to replenish core Tier 1 capital. Goldman Sachs expects this move could lead to a 4% to 7% dilution in earnings per share, but it will also enhance the banks' capital ratios. Analysts believe that the injection will help the banks maintain growth and dividends, with expectations that the dividend payout ratios for ICBC and ABC will increase by 1.2 to 2.3 percentage points