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My investment in ICBC Bank (1398.HK)
08 Aug 2021 (638 views)

I invested in 171,000 shares of ICBC at an average price of HK$4.89. It went to a high of $5.89 at end March. 

Since then, the price of ICBC had dropped to the current price of $4.29. I received a dividend of $0.30 recently.

I checked the news about ICBC to see if there was any reason for the price drop. There were no negative news.

The financial results for the 1Q 2021 showed a small drop in profit compared to the previous quarter.  It could not have accounted for the recent drop in stock price. 

The only reason is the sell off in tech stocks in China due to the recent action taken by the government. However, this would not affect the earnings of ICBC. Instead, it should be helpful for banks - as it reduces the competition from the fintech companies.

One possible reason for the fall in the stock price is the selling of China stocks by the foreign investors. 

At the current stock price of $4.29, ICBC has a price earning ratio of 4.46X and a dividend yield of 7.46%. 

The average PE ratio of banks in other markets is between 10X to 15X and the average dividend yield is between 3% to 4%.

In view of the sharp drop of 27% in the stock price from the peak of $5.89, I have decided to increase my investment in ICBC stock.

When I looked at the price chart over the past three years, the stock price tend to reach a bottom in August to October and to increase sharply towards the end of the year. The stock price for 2021 seems to follow this past pattern.

There is the possibility that the results for 2Q could be weak, but I do not expect this to be the case. The results should be released soon. 

Note - This is my personal view. I am not giving investment advice. I am not recommending any investment in this stock at any specific price. Please do your own research before you make your investment.

 


My investment in ICBC Bank (1398.HK)
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I invested in 171,000 shares of ICBC at an average price of HK$4.89. It went to a high of $5.89 at end March. 

Since then, the price of ICBC had dropped to the current price of $4.29. I received a dividend of $0.30 recently.

I checked the news about ICBC to see if there was any reason for the price drop. There were no negative news.

The financial results for the 1Q 2021 showed a small drop in profit compared to the previous quarter.  It could not have accounted for the recent drop in stock price. 

The only reason is the sell off in tech stocks in China due to the recent action taken by the government. However, this would not affect the earnings of ICBC. Instead, it should be helpful for banks - as it reduces the competition from the fintech companies.

One possible reason for the fall in the stock price is the selling of China stocks by the foreign investors. 

At the current stock price of $4.29, ICBC has a price earning ratio of 4.46X and a dividend yield of 7.46%. 

The average PE ratio of banks in other markets is between 10X to 15X and the average dividend yield is between 3% to 4%.

In view of the sharp drop of 27% in the stock price from the peak of $5.89, I have decided to increase my investment in ICBC stock.

When I looked at the price chart over the past three years, the stock price tend to reach a bottom in August to October and to increase sharply towards the end of the year. The stock price for 2021 seems to follow this past pattern.

There is the possibility that the results for 2Q could be weak, but I do not expect this to be the case. The results should be released soon. 

Note - This is my personal view. I am not giving investment advice. I am not recommending any investment in this stock at any specific price. Please do your own research before you make your investment.