Daiwa has launched its research coverage on ICBC (01398), assigning a "Hold" rating with an H-share target price of HK$7.8. The firm highlights that ICBC stands as the world's largest bank by total assets and is consistently recognized among the most profitable financial institutions. However, Daiwa notes that the current valuation multiple of 0.55 times the 2026 forecast price-to-book ratio already reflects the bank's capital strength.

Daiwa suggests that for ICBC to achieve a re-rating, its return on equity would need to significantly exceed expectations or the bank would need to raise its dividend payout. Yet, the firm believes neither scenario is likely to materialize in the current downward cycle. That said, potential downside is cushioned by the bank's sovereign backing, its systemic importance, and its predictable dividend distributions.

Daiwa forecasts that ICBC's total operating profit will grow at an annual rate of 4% to 8% between 2026 and 2028, with projected earnings per share of RMB 0.319, RMB 0.336, and RMB 0.358 for the respective years.