thesis - the measurement of chinese banks' intrinsic value in its developing securities market...

東吳大學商學院企業管理學系碩士班碩士論文

Soochow University Global Business Program School of Business

Thesis

從公開市場資訊衡量轉型經濟中的中國銀行業的內在

價值

The Measurement of Chinese Banks Intrinsic Value in its

Developing Securities Market

研究生 (Student)Gareth Cottam

指導教授(Advisor) Dr Muhan Nao (諾木汗)

This dissertation is submitted to Global Business Program

School of Business Soochow University

in partial Fulfilment of the Requirements

for the Degree of

Master

in

Business Administration

May 2011

i

Abstract This research is motivated by the importance of valuing firms or equity Without an

assessment of value price dictates an investorrsquos view of worth An estimated value

creates a reference point in which to compare with price This comparison can then be

used to base an investment decision to buy sell or hold The aim of this paper is to

examine valuation techniques with a focus on a practical issue of creating a valuation

range rather than a single lsquoprecisersquo number This study is the first to examine the

practical application of the Montgomery Method of valuing a company

KEY WORDS Value Investing Benjamin Graham Valuation Montgomery Method

ii

Acknowledgements I would like to express my heartfelt gratitude to the supervisor of my thesis Dr Muhan

Nao for his invaluable guidance and support His time and relentless effort spent in

reviewing my work are very much appreciated

My friend Colin Fukai was perhaps the most careful reader of multiple drafts of this

manuscript He is a true craftsman of the art of writing and his comments are literally

incorporated on every page of this paper I thank him for his tremendous assistance I am

also truly grateful for the support I received from my family and friends and of course to

my fellow MBA classmates whom I got to know over these last few semesters

As with any work such as this full responsibility for errors must be borne by the author I

hope those that remain are minor and few in number

iii

Table of Contents Abstract i

Acknowledgements ii

List of Tables vi

List of Figures vii

I Introduction 1

11 Background and Motivation 1

12 Purpose of the Research 3

13 Research Scope and Object 4

14 Significance of the Research 4

15 Research Process 5

II Literature Review 7

21 Chinarsquos Financial System 7

211 Chinese Banking Industry 7

212 Monopoly to Competition 7

213 Non-State-Owned Commercial Banks 9

214 Key Performance Indicators (KPIs) for Banks 9

215 Profit versus Profitability 10

216 Speculative Securities Market 12

22 Valuation scope What is value 14

221 Market Value 15

222 Fair Value 15

223 Book Value 15

224 Investment Value 15

225 Intrinsic Value 16

23 Valuation objective Why value companies 17

231 Valuation is not an exact science 18

232 Bargains and Value 19

24 Valuation methods How can companies be valued 20

241 Income Approach 21

iv

242 Market Approach 23

243 Asset Approach 23

25 The Worldrsquos Most Successful Investor 24

251 Fundamental Analysis 25

252 Valueable 25

26 Hypothesis 26

III Research Methodology 28

31 Introduction 28

32 Sampling and Data Collection 29

33 Valuation Models 30

331 Estimating Target Bankrsquos Value Using the Asset Approach 30

332 Estimating Target Bankrsquos Value Using the Market approach 30

333 Estimating Target Bankrsquos Value Using the Montgomery Method 30

34 Analysis 31

341 Hypothesis Testing 31

IV Results of the Comparison 33

41 Introduction 33

42 Descriptive Statistics Asset Approach 33

421 Non-State-Owned Banks 33

422 State-Owned Banks 36

43 Descriptive Statistics Market Approach 38

431 Non-State-Owned 38

432 State-Owned 42

44 Descriptive Statistics Montgomery Method 46


442 State-Owned 48

45 Market Price Comparison with Value Range 48


452 State-Owned 51

46 Macro Economic Factors 53

47 Results of Hypothesis Testing 54

48 Summary of Findings 56

v

V Research Findings and Conclusions 58

51 Introduction 58

52 Considerable Differences Among Various Evaluations 58

53 Research Implications 59

54 Limitations of the Research 59

55 Recommendations for Future Research 60

56 Conclusions 61

References and Bibliography 63

Appendix 70

vi

List of Tables Table 421-1 Bank of Communications 34

Table 421-2 CITIC Bank 34

Table 421-3 China Merchants Bank 35

Table 421-4 Shanghai Pudong Development Bank 35

Table 422-1 Agricultural Bank of China 36

Table 422-2 Bank of China 36

Table 422-3 China Construction Bank 37

Table 422-4 Industrial and Commercial Bank of China 37

Table 431-1 Summary of SPDB New Shares Issue Prices 41

Table 441-1 Comparison of Non-State-Owned Bankrsquos Montgomery Intrinsic Value 47

Table 442-1 Comparison of State-Owned Bankrsquos Montgomery Intrinsic Value 48

Table 451-1 Bank of Communications 49








vii

List of Figures Figure 46-1 Comparative discrepancy between market price and intrinsic value of non-

state-owned banks 55

Figure 46-2 Comparative discrepancy between market price and intrinsic value of state-

owned banks 56

1

I Introduction

11 Background and Motivation Greed is said to be a cardinal sin and yet it seems to be a recurring theme through the

ages Humanityrsquos tendency to succumb to ldquothe love of moneyrdquo1 can be seen from the

tulip mania in the mid-16th century the Wall Street Crash of 1929 continuing through

the 1987 ldquoBlack Mondayrdquo the Asian Financial Crisis Enron and the most recent sub-

prime collapse and subsequent Global Financial Crisis (GFC) (Sargent 2008) The world

has been rocked by one financial scandal after another

In 2001 the Enron accounting scandal and the subsequent failure of several other firms

such as WorldCom lead to the disgrace of the accounting firm Arthur Anderson (Healy

amp Palepu 2003) The sub-prime crisis and ensuing GFC can be linked to reckless

lending practices that led to the collapse of financial institutions such as Bear Stearns

Merrill Lynch and Lehman Brothers (Wei amp Corkery 2008) It seems that the financial

world does not learn from its mistakes

In light of such recent crisis the stability of the world financial system is called into

question Chinarsquos economy appears to have ridden out the storm well and ldquois an engine

of growthrdquo for the rest of the world (Ezrati 2010) The PRC has been credited with

leading the world out of the recent global recession and in 2010 surpassed Japan as the

worldrsquos second-largest economy (Hamlin amp Yanping 2010) So what is underlying the

Chinese economy

1 New Testament The love of money is the root of all evil (1 Timothy 610 KJV)

2

While Chinarsquos future influence on the global economy will undoubtedly increase this

should be tempered with an understanding that China is still a developing nation

Chinarsquos current financial system is dominated by a large banking sector that has been

accused of being inefficient and poorly regulated (Allen Qian Zhang amp Zhao 2010) If

China falters how will the world economy be affected What if the Chinese financial

system were to suffer a crisis similar to the sub-prime collapse Is this likely

As Chris Browne (2007) writes China is still a communist country The government

owns or controls many of the listed and traded companies on the Shanghai Shenzhen and

Hong Kong stock exchanges Investors are a silent partner with no recourse should the

government decide to change policies

ldquoBy market capitalisation it[China] has three of the four largest banks the two largest

insurance companies the second-largest stock market and a lengthening list of

investment fundsrdquo (Economist 2010) Chinese companies are coming to dominate the

financial markets of the world In fact the Industrial and Commercial Bank of China

(ICBC) is ranked the worldrsquos largest bank by assets and valuation while still majority

state-owned (Hamlin amp Yanping 2010) Is this a cause for concern

What does market capitalization mean According to Berk and DeMarzo (2007) market

capitalization is ldquothe total dollar market value of all of a companys outstanding

shares Market capitalization is calculated by multiplying a companys shares outstanding

by the current market price of one sharerdquo The investment community uses this figure in

determining a companys size as opposed to sales or total asset figures Given the

3

speculative nature of Chinarsquos developing securities markets (Wang amp Xu 2004) (Liu amp

Shrestha 2008) does this market capitalization figure represent the true value of the bank

Perhaps Hollywood producer Oliver Stone had good cause to revive his character

Gordon Gekko of the 1987 film Wall Street to play the antihero of the 2010 sequel

Gekko reminds us all the lessons to be learned from the mantra of Wall Street ldquoGreed is

goodrdquo It seems the cardinal rule of capitalism is that an item is worth what people will

pay but is the willingness of buyers to pay high prices a reliable indicator of value

12 Purpose of the Research The purpose of this paper is to apply appropriate valuation methodologies in an attempt

to measure the intrinsic value of Chinarsquos banks independently of their market price The

aim is to examine valuation techniques with a focus on a practical issue of creating a

valuation range rather than a single lsquoprecisersquo number

By examining the value range of the banks in comparison to their market prices we can

determine if a margin of safety exists and estimate the risk that must be assumed if

investing in Chinarsquos banks This research is of importance to anyone considering

investing in China from Institutional Investors to executives considering Mergers and

Acquisitions The research would play a key role in corporate finance as valuations can

be used to assist in value enhancing financial decisions and corporate strategies

The study is based on banks listed on the Chinese stock exchanges The data were

collected from annual reports extracted from websites and financial databases The

scope of the research is where possible for the previous five years of company financial

4

data including the year 2010 The data on each banks market price for comparison were

sourced from the Shanghai Exchange database

13 Research Scope and Object In this study the scope of the research was confined to the top four ranked state-owned

and non-state owned commercial banks These banks are highly visible in the market and

due to Chinarsquos acceptance into the World Trade Organization (WTO) in 2001 it is

assumed that their financial data is the easiest to source and potentially the most

transparent

Various valuation techniques were applied to establish a range of values for the selected

banks to use in comparison with their listed market prices The importance of this effort

is to establish if Chinese banks are undervalued overvalued or valued accordingly

These valuation figures will be used to test the research hypotheses

14 Significance of the Research This research adds to the existing body of knowledge regarding the valuation of banks

and in particular the value of the Chinese banks in the developing Chinese securities

markets

The Montgomery valuation method studied here also has potential uses for valuing

private firms There is a need to establish a more accurate method to value private firms

for initial public offerings mergers and acquisitions and so forth With the results of this

research and previous works such as Pratt et al (200) Thavikulwat (2004) and King

(2010) it is hoped that the valuation methods for private firms are improved

5

The significance of the results is that it provides an alternative valuation method by

combining the Montgomery Method with existing valuation techniques The fact that the

combination is simple to use makes it more possible for analysts to test and apply the

results found by this research More specifically if the results are consistent with possible

future research this may become another valuation method that is established in valuing

companies

15 Research Process The process of this research is as follows

1 Definition of study purpose

Based on the background and motivation of this study to establish the purpose

of this research

2 Literature and theoretical review

Review extant literature and theories regarding the banking industry more

specifically Chinarsquos banks and valuation methodologies

3 Research Framework

Apply the relevant extant literature and theories to determine appropriate

valuation models for the Chinese banking industry

4 Collection of appropriate financial data

Gather the appropriate financial data for each of the selected banks for the

past five years primarily sourced from annual reports

5 Data Analysis

Apply various relevant valuation models to analyze the financial data

6 Test Hypothesis

Apply analysis of valuation models to test hypotheses

7 Conclusions and recommendations

6

Interpret the results of the data analysis state conclusions and provide

recommendations

7

II Literature Review This section reviews the literature regarding Chinarsquos financial system exploring its

banking system and securities market Key performance indicators for banks are also

discussed as is the role of profit in a transitioning economy Various definitions of value

are reviewed and the reasons for and approaches to valuation are considered

21 Chinarsquos Financial System China is considered a rapidly developing country with boundless opportunities yet

Chinarsquos potential is still relatively unknown How much does the rest of the world know

about China The government is still run by the Communist Party of China (CPC) and

the majority of publicly traded companies were once (and still are) majority state-owned

One can look at various sources such as the Chinese stock market and check the prices of

many of its listed companies but how can you know the value of these companies How

can anyone invest in China without having a sense of the value of the investment

211 Chinese Banking Industry As China has moved from a planned economy to a market economy many of its

industries have moved from monopoly positions towards more direct competition The

banking industry of China is a good example of this transition

212 Monopoly to Competition ldquoBetween 1950 and 1978 Chinarsquos financial system consisted of a single bank ndash the

Peoplersquos Bank of China (PBOC) a central government-owned and controlled bank under

the Ministry of Financerdquo(Brandt amp Rawski 2008) Due to government restrictions the

PBOC was a monopoly its main role was to finance physical production plans

8

controlling about 93 percent of the total financial assets of the country and handling

almost all financial transactions (Berger Hasan amp Zhou 2008)

As China began its transition in 1978 from a planned economy to a market economy the

role of the PBOC changed PBOC was formally established as Chinarsquos central bank and

four state-owned banks took over the majority of commercial banking business in a

gradual process from the PBOC Berger et al (2008) continues stating that Chinas

current banking reform includes partially privatizing its dominant Big Four state-owned

banks and taking on minority foreign ownership of these institutions Other state-owned

banks are also engaging in this practice A key finding of Berger et al (2008) was that the

Big Four state-owned banks are by far the least efficient and that minority foreign

ownership of other banks is associated with significantly improved efficiency

ldquoSince the process of economic reform began in China the Chinese banking system has

grown impressively the state-owned commercial banks (SCB) continue to dominate the

market as of the end of June 2003 the four SCBs held 65 of deposits provided 80 of

all payment and settlement services and accounted for 56 of all loans granted by

financial institutions in China However the share of the market held by the shareholding

commercial banks has grown substantially in the last few years By the end of June 2003

these banks controlled 136 of total financial sector assetsrdquo (Wu amp Chen 2010)

Allen et al (2010) state that even with the entrance and growth of many domestic and

foreign banks and financial institutions in recent years Chinarsquos banking system is still

mainly controlled by the four largest state-owned banks with over 50 percent share of

9

total banking assets between them2 All of these ldquoBig Fourrdquo banks have become publicly

listed and traded companies in recent years with the government being the largest

shareholder and retaining control

213 Non-State-Owned Commercial Banks Wen (2008) defines 12 commercial banks in China as ldquonon-state-owned commercial

banksrdquo To be considered a ldquonon-state-owned commercial banksrdquo these 12 commercial

banks must meet several criteria First each of them has an approval from Chinese

banking regulators to operate as nationwide commercial banks Second they are

commercial banks that are not owned by the state government These banks are also

called non-state-owned joint-stock commercial banks in China (JSCBs) The state

controlled entities are those over which the PRC government directly holds over 50 of

the outstanding shares or voting rights and has the ability to control or the power to

govern their financial or operational policies such as the Agricultural Bank of China and

other big four banks

Only seven non-state-owned Chinese commercial banks are listed in the two national

stock exchanges in mainland China-Shanghai Stock Exchange and Shenzhen Stock

Exchange Most of the listed non-state-owned Chinese commercial banks prefer to

choose the primary domestic stock exchange in Shanghai (Wen 2008)

214 Key Performance Indicators (KPIs) for Banks Ho and Wu (2006) state that the performance criteria commonly used in financial

analysis are liquidity asset utilization leverage profitability growth and stock

2 Things seem to be starting to change with the decreasing weight of state-owned commercial banks in the banking system (with 739 percent of the total assets in 1993 and 546 percent in 2004 and remain at this level currently) Peoples Bank of China Financial Stability Report 2010 - Source Peoples Bank of China

10

performance In their study to establish benchmark performance indicators for Australian

banks Ho and Wu (2006) adopted financial statement analysis to select ratios The ratios

were classified in accordance with their respective attributes under the six categories

profitability asset utilization leverage liquidity growth and stock performance

Ho and Wu (2006) determined 13 ratios for analyzing the profitability factor 16 for

leverage eight for liquidity two for asset utilization 12 for growth and eight for stock

performance In total 59 financial ratios were selected as the aggregated indicators for

evaluating the performance of the banks Browne (2007) advises that price to book value

price to earnings and price to net current assets are among those ratios important to

valuing a company Whereas Montgomery (2010) stresses that return on equity is the

most important ratio to consider

215 Profit versus Profitability McGuigan et al (2007) state that in a free enterprise system profits play an important

role in guiding the decisions made by resource owners Profit and profit opportunities

play a major role in determining the efficient allocation of resources in any market

economy Without the market signals that profit gives it would be necessary to develop

alternative schemes on which to base resource-allocation decisions These alternatives

are often bureaucratic and frequently lack the responsiveness to changing market

conditions that a free enterprise system provides

In addition to the role of profit in capital allocation risk bearing is also a factor The risk

bearing theory of profit suggests that there is a need for profit above a competitive rate of

return necessary to compensate the owners of the firm for the risk they assume when

11

making their investments (McGuigan Moyer amp Harris 2007) However the majority

ownership of the Chinese banking industry is still in the governmentrsquos hands

Economic theory assumes that the objective of a firm is to maximize shareholder wealth

This creates an interesting dilemma In an agency relationship the owners frequently

delegate decision-making authority to professional managers Because the managers

(agents) have much less to lose than the owners (principals) the agents often seek

acceptable levels (rather than a maximum) of profit and shareholder wealth while

pursuing their own self-interests (Westort Kashian amp Cummings 2010) As the majority

owners are a communist government do the state-owned banks aim to maximize profits

Should that even be a concern

Montgomery (2010) provides the following example as a thought exercise Imagine you

own a business that you initially invest $10 million dollars and never invest another cent

into it In its first year it earns you $1 million profit the next year $2 million then $3

then $7 and then $10 million Consider its desirability

Now suppose you own a different business that requires the same initial investment and

produces the same series of profits There is one difference The second business

requires you to reinvest half the profits back into the business each year to keep it

successful against its competitors

Which business would you prefer to own The first business is more desirable He refers

to the effect on the second business as inhibited earnings basically more capital is

required to generate the same level of profits The second business is therefore less

profitable

12

Montgomery (2010) argues that while profits are important the amount of equity

required to generate that profit is of greater importance A companyrsquos profit figure can

bear little resemblance to cash profits or cash flow It is the profitability of a company

that should be considered in evaluating the value of a company

216 Speculative Securities Market Chinarsquos two domestic stock exchanges the Shanghai Stock Exchange (SHSE) and

Shenzhen Stock Exchange (SZSE) were established in 1990 (Allen Qian Zhang amp

Zhao 2010) Their scale and importance are not comparable to the banking sector and

they have ldquonot been effective in allocating resources in the economy in that they are

highly speculative and driven by insider tradingrdquo (Berger Hasan amp Zhou 2008)

Wang and Xu (2010) argue that with the sustainable development of Chinas economy

Chinas securities market would play a more and more important role in the global

securities market However as an emerging market the speculative psychology and

short-term investing behavior in Chinas securities market is clearly visible and therefore

it is of important theoretical and practical significance to research on behavioral finance

features of Chinas securities market

Liu and Shrestha (2008) discuss how numerous studies have analyzed how stock prices

react to changes in macro-economic variables Some studies for example examined the

impact of individual factors such as inflation market dynamics and interest rates on stock

prices (Fama 1981 1990 Mandelker and Tandon 1985 Bulmash and Trivoli 1991

Asprem 1989 Schwert 1990 Mukherjee and Naka 1995) Others on the other hand

examined the relationship between stock prices and a wider variety of financial and

macro-economic variables (Chen et al 1986 Fama and French 1989 Cheung and Ng

13

1998) However the studies mentioned all focus on stock markets in developed countries

Limited research has been performed on the stock markets in developing countries such

as China

The literature on the stock markets of China is limited in scope This study is also

motivated by the fact that the Chinese stock market is very different from others

especially in terms of the extent of government regulations and the investor composition

(Allen Qian Zhang amp Zhao 2010) In China financial data of listed companies

(especially small firms) are not reliable Bankruptcies are rare and the standards of

corporate governance are very low (Brandt amp Rawski 2008)

Allen et al (2010) expands that the regulatory framework for the stock market is not fully

developed and information available to investors is not always transparent Allen et al

(2010) also asserts that individual investors constitute approximately 99 per cent of the

investors in the Chinese stock market With little investment knowledge or experience

they trade like noise traders3 and purely speculate in the stock market in the absence of

market transparency The result is stock market mania

Another interesting feature of the Chinese stock market is that almost all listed firms are

formerly state-owned enterprises (SOEs) 4 The privatization process involves

restructuring the companies into incorporated companies through selling a certain

proportion of shares to employees the general public other SOEs and legal entities such

3 The term used to describe an investor who makes decisions regarding buy and sell trades without the use of fundamental data 4 At the end of the 1990s more than 90 percent of the enterprises listed on Chinarsquos two stock exchanges remained state controlled with state-owned entities as their controlling shareholders and as of 2002 only 15 percent of stocks are associated with private corporations Many companies have state-owned parent companies that are not listed and are hybrids of public and private enterprises in which the government floats minority interests to raise money while retaining the bulk of shares

14

as banks and insurance companies etc at a price around book value per share Typically

shares owned by legal entities and the remaining shares held by the state (ie by local or

central government) account for two-thirds of the total number of shares and they are not

allowed to be traded As a result only one-third of the shares are allowed to be traded

(Liu amp Shrestha 2008)

Kang Liu and Ni (2002) write that the Chinese stock market is also driven by liquidity

As there is no well-developed social security system in China the savings rate is among

the highest in the world Bank interest rates are regulated by the government and often

kept low for the purpose of economic development resulting in negative real interest

rates Further all the property is owned by the state and property investment was not

allowed until recently with the results that the stock market is the natural choice for

investors who are looking for higher rate of returns despite the high risks involved

A speculative securities market suggests that market prices do not represent the true value

of the listed security Analysts and local investors seem to be more focused on short term

earnings gains than future long term success

22 Valuation scope What is value The definition of ldquovaluerdquo varies in the economic literature Depending on the context

there are several standards of value these include

Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15

These standards of value are defined as follows

221 Market Value ldquoThe price expressed in terms of cash equivalents at which property would change

hands between a hypothetical willing and able buyer and a hypothetical willing and able

seller acting at armrsquos length in an open and unrestricted market when neither is under

compulsion to buy or sell and when both have reasonable knowledge of the relevant

factsrdquo International Glossary of Business and Valuation Terms (International Glossary)

(2001)

222 Fair Value ldquoThe amount at which an asset (or liability) could be bought (or incurred) or sold (or

settled) in a current transaction between willing parties that is other than in a forced or

liquidation salerdquo (Hitchner 2003) or more directly ldquothe term fair value is usually a

legally created standard of value that applies to certain specific transactionsrdquo (Pratt

Reilly amp Schweihs 2000)

223 Book Value ldquoWith respect to a business enterprise the difference between total assets (net of

accumulated depreciation depletion and amortization) and total liabilities as they appear

on the balance sheet (synonymous with Shareholders Equity)rdquo International Glossary

(2001)

It is important to note that the firmrsquos book value may be an unreasonable measure of its

true value because of the idiosyncrasies of accounting

224 Investment Value The International Glossary defines investment value as ldquoThe value to a particular

investor based on individual investment requirements and expectationsrdquo Hitchner (2003)

16

adds that investment value is the value to a particular investor which reflects the

particular and specific attributes of that investor In the case of a stock exchange an

auction setting is created in which each bidder is likely to offer a different price based on

their individual outlook and the synergies that each bidder brings to the transaction

225 Intrinsic Value Hitchner (2003) defines intrinsic value as the ldquoamount an investor considers to be the

lsquotruersquo or lsquorealrsquo worth of an item based on an evaluation of available facts hellip It is an

analytical judgment of value based on perceived characteristics inherent to the

investmentrdquo

Graham et al (1988) states a general definition of intrinsic value would be ldquothat value

which is justified by the facts eg assets earning dividends definite prospects

including the factor of managementrdquo Given the dynamic nature of business the primary

objective is to emphasize the distinction between ldquovalue and current market price but not

to invest lsquovaluersquo with an aura of permanencerdquo

For companies and various investment alternatives (such as bonds) their value is intrinsic

because it is generated by the underlying operations of the enterprise in the form of

earnings dividends and cash flows The concept of intrinsic value is the actual worth of

a security as opposed to its market or book value and so on For example intrinsic value

may differ from market value because of brand names patents and other intangibles that

are difficult for investors to quantify

In that case value is measured by its assessed qualities or by the esteem in which it is

held If intrinsic value is the actual worth of a company or an asset based on an

17

underlying perception of its true value including all aspects of the business in terms of

both tangible and intangible factors then what are the measurable qualities that create

value for a company

There are various approaches but no standard formula exists for calculating the intrinsic

value of an asset As value can vary from individual to individual due to differing

perceptions how does that affect the way in which a business is valued

23 Valuation objective Why value companies While computers can run simulations and compute numerous mathematical investment

models the fact remains that for the foreseeable future individuals are still responsible

for most major investment decisions This can be better summarized by Benjamin

Graham who said

ldquoInvesting like medicine law and economics lies somewhere between an art and

a science Certain aspects of investing lend themselves to the scientific approach but

corporations are still business enterprises subject to the vagaries of human management

and operate in highly dynamic and competitive environments As a result for the

security analyst the number of variables remains almost infinite and the judgment factor

still dominates investment decisionsrdquo (Graham Dodd Cottle Murray amp Block 1988)

The efficient market theory states that since the stock market is so quick to adjust to new

information security prices very quickly represent all the information available This is

not a realistic tenet investors tend to fall prey to their emotions and as a group may

decrease a stock price below intrinsic value when bad news reaches them Conversely

they tend to increase stock prices to levels above intrinsic value upon hearing good news

18

As such human behavior cannot be modeled with mathematics There is no computer

model that can predict whether someone will buy or sell their securities or at what price

The uncertainty will always be there It cannot be calculated Risk and reward are beyond

the intellectual limits of a computer A buyer must decide on a fair value before making

a bid and a seller must determine whether the bid is a reasonable value before deciding to

accept or reject the offer

Valuation has many subjective factors which lead to many differences of opinion This

can be summed up in the English expression ldquoone manrsquos trash is another manrsquos treasurerdquo

Every time there is a trade of stock there is a difference of opinion the buyer thinks the

stock is worth having and the seller does not

The problem in valuation is not that there are not enough models for valuations it is that

there are too many This leads to the dilemma of which model(s) to use

231 Valuation is not an exact science ldquoValuation rests on assumptions By definition the choice of assumptions in a valuation

report requires the professional judgment of the valuatorhellip The value can be higher or

lower if certain critical assumptions are changedrdquo (King 2010)

King (2010) continues stating that readers of financial statements expect exact answers

They see numbers and think of math an exact science failing to realize however that

most companies round to the nearest thousand and in some cases million dollars in their

financials

So the question becomes if valuations are not exact why are they performed In short

because valuation matters It underpins a major proportion of financial decisions in

19

mature economies From mergers and acquisitions to institutional investors failure to

properly understand the position and worth of a business risks financial exposure for a

wide range of stakeholders Valuations enable investors and executives to make more

informed decisions regarding the use of capital

Graham et al (1988) advocate that security analysis and valuation does not seek to

determine exactly what is the intrinsic value of a given security It needs only to establish

either that the value is adequate (eg to protect a bond or to justify a stock purchase) or

else that the value is considerably higher or considerably lower than the market price

Without an assessment of value price dictates an investorrsquos view of worth An estimated

value creates a reference point in which to compare with price This comparison can then

be used to base an investment decision to buy sell or hold

232 Bargains and Value Studies of market efficiencies modern portfolio theory and the insights from financial

economics argue that for all investors or for the average investor there are no consistent

returns to be earned from security analysis (Graham 2003) Supposedly the marketrsquos

pricing mechanism fueled by the efforts of capable analysts is too efficient to afford

opportunities even for some investors to earn superior returns from security portfolios

ldquoThe Graham and Dodd approach however takes the view that the marketrsquos pricing

mechanism remains based to such a degree upon faulty and frequently irrational

analytical processes that the price of a security only occasionally coincides with the

intrinsic value around which it tends to fluctuaterdquo (Graham Dodd Cottle Murray amp

Block 1988)

20

In everyday life we talk about ldquogetting value for moneyrdquo What we mean when we use

this phrase is paying less for something than we think it is worth When we use this

everyday expression we are distinguishing between the concept of value and price

Value is what we get and the price is what we pay

Most people are bargain hunters When their favourite grocery items go on sale they buy

more Their behavior in the stock market appears to be the opposite When share prices

fall investors are afraid to enter the market Without knowing the value of a business it

is difficult to know if the investment is a bargain If there is a discrepancy between price

and value then bargains can be found But can businesses (or a part ownership of those

businesses) be bought at a bargain price Proponents of the Efficient Market Hypothesis

(EMH) would say ldquonordquo Benjamin Graham ndash often referred to as the father of ldquovalue

investingrdquo and followers of his teachings would say ldquoyesrdquo

Value investing is in effect predicated on the proposition that the efficient-market

hypothesis is frequently wrong In the short run the market prices of good companies can

go down and bad companies can go up But over the long term share prices converge

with intrinsic value At the core of its success is the recurrent mispricing of securities in

the marketplace By finding securities whose prices depart increasingly from underlying

value investors can achieve above-average returns while taking below-average risks

24 Valuation methods How can companies be valued There is a substantial body of literature discussing different methods applied to valuation

(Graham et al 1988 Hitchner 2003 King 2010 Thavikulwat 2004 Nielsen and

Hudson 1987 Lokey and Masson 1987 and Damodaran 1994) The general consensus

among authors is that three general categories exist to value companies These categories

21

are based on future economic use earnings (income) comparable sales in the market

(market) or replacement costs (asset)

Income Approach

Market Approach

Asset Approach

Each of the above approaches has a variety of methods that can be independently applied

to valuation However no one of them is perfect Researchers can only choose a method

that has the least amount of drawbacks for the studyrsquos particular situation The following

are a selection of the various valuation methods grouped and defined including pros and

cons of each method

241 Income Approach The income approach is typically calculated using the discounted future-earnings method

or a derivative of such It works by discounting through the use of an appropriate rate

the estimated future earnings (net cash flows) for a specific number of years (Nielsen amp

Hudson 1987)

According to this standard stock valuation model the determinants of stock price are the

expected cash flows from the stock and the required rate of return commensurate with the

cash flows riskiness Asquith et al (2005) examined analysts reports issued during 1997-

1999 They document that 991 percent of analysts mention the use of some kind of

earnings multiples 128 percent claim to use some variation of discounted cash flow and

only seven of all reports use the price-earnings to growth ratio as their valuation method

22

Currently popular methods used by analysts include Discounted Cash Flow (DCF)

method Discounted Dividend Growth model and the Gordon Growth Model despite

which each has its own flaws and disadvantages The prevalent use of these methods has

been documented by Bradshaw (2002) Barker (1999) and Asquith et al (2005)

Analysts make forecasts on earning cash flows and growth rates and ultimately issue a

stock recommendation or a target price that reflects their opinions about the investment

value of the company Since the analysts primary role is to advise investors on whether a

stock is undervalued or overvalued recommendations should be related to their

valuations relative to current stock prices The predominant use of earnings forecasts in

valuing stocks as documented by Bradshaw (2002) and Asquith et al (2005) suggests that

analysts earnings forecasts valuations and stock recommendations are potentially flawed

The problem for this type of valuation is that it deals with the future The present value

of the cash flows and hence the stock price is a function of the analystrsquos expectations of

the future However the future is unknowable and therefore any value derived from

these models is pure estimation

Montgomery (2010) illustrates a further flaw in the Dividend Discount Model (DDM)

and its derivatives ldquoIf a company doesnrsquot pay all of its earnings out as a dividend there

are a potentially large amount of earnings that are retained and the DDM doesnrsquot

recognise this And if a company can generate high returns on those retained earnings

and can continue to retain and compound these earnings adjusting down its payout ratio

at the same time those retained earnings may be worth significantly more than the

dividends But the DDM doesnrsquot value these retained earningsrdquo

23

242 Market Approach The comparable sales approach focuses on sales of similar businesses in arms-length

transactions (Lokey amp Masson 1987) Data concerning sales of comparable companies

is often scarce nonetheless it is possible to examine the transactions in publicly traded

companies Given foreign banks ownership stakes and based on the price paid for

buyerrsquos stakes in Chinese banks it should be possible to establish the value foreign banks

assigned to each bank however this will not account for any special agreements5 that

may be involved

Hitchner (2003) outlines some of the advantages of this approach is it is simple to

understand and apply Also it uses actual data not estimates based on a number of

assumptions or judgments There are some drawbacks to this approach such as if there

are no similar companies or no recent transactions to compare to Some other

disadvantages of this approach include a lack of transparency in a transaction Most

important assumptions that were made in purchasing a comparable company are hidden

such as the buyerrsquos expectations of growth in sales or earnings It also lacks flexibility to

include unique operating characteristics of the firm in the price paid for that stake

243 Asset Approach The asset approach focuses on the assets of the business and the cost to replicate the

business or alternatively the amount to be received upon liquidation (Lokey amp Masson

1987) The assets of a company are typically comprised of 1) current assets (2) fixed

assets (3) personnel and (4) goodwill and other intangible assets (Nielsen amp Hudson

1987) While employees are not capitalized on the balance sheet they are often a firms

5 Such as strategic alliances or joint ventures in the credit card business and so forth

24

most important asset therefore employee evaluation is a major part of the quality factors

to be considered when evaluating a company

Neisen et al (1987) states that the asset approach determines value on a two-step basis

1 The value of the assets (current and fixed) other than cash goodwill and any

agreement not to compete and

2 The value of goodwill and any agreement not to compete6

The second step is more difficult to determine and given the subjective nature of

evaluating the value of goodwill and agreements the researcher will not include this

aspect in the study

25 The Worldrsquos Most Successful Investor In 1984 Warren Buffett gave a speech at the Columbia Business School challenging the

idea that equity markets are efficient He debated against Michael Jensen a proponent

for the ldquorandom walkrdquo and Efficient Market Hypothesis (EMH) Despite his argument

and presented evidence (Buffett 1984) nothing further was researched and it seems

Warren Buffettrsquos achievements as an investor have been dismissed as an ldquoaccidentrdquo or

ldquoflukerdquo in academia What is most striking is that Warren Buffett is inarguably one of if

not the most successful investors in the world and yet he remains rarely cited within

traditional academia

Dozens of books have been written over the years that analyze Warren Buffettrsquos

investment style While he is considered one of the most successful investors in the world

he has never detailed his exact method of valuing a company and determining whether it

6 An agreement not to compete is a common provision in a contract for sale of a business in which the seller agrees not to compete in the same business for a period of years or in the geographic area

25

has a sufficient margin of safety Few books have been able to figure out what Warren

Buffettrsquos real ldquosecret formulardquo of investing is

Warren Buffett is often quoted as saying he considers himself to be 85 Benjamin

Graham and 15 Philip Fisher In his paper The Superinvestors of Graham-and-

Doddsville Buffett (1984) states that Graham and Dodd investors hellip do not discuss beta

the capital asset pricing model or covariance in returns among securities They simply

focus on two variables price and valuerdquo

251 Fundamental Analysis According to Dodd (1988) in an era of acquisitions leveraged buyouts and restructurings

an intense analytical effort is required to determine the value of companies The Graham

and Dodd concept of security analysis with its emphasis on value is based on the

principles of fundamental analysis Graham et al (1988) describes fundamental analysis

as ldquoA method of evaluating a security that entails attempting to measure its intrinsic value

by examining related economic financial and other qualitative and quantitative factorsrdquo

252 Valueable While Warren Buffett has never revealed his formula for valuing a company his annual

chairmanrsquos letters contain great insight into his investment philosophy In Roger

Montgomeryrsquos book ldquoValueablerdquo Montgomery (2010) discusses two methods derived

from Buffettrsquos writings and presents two valuation tables (reproduced in Tables 21 and

22 contained in the appendix) Montgomery asserts that the basic arithmetic used in the

first table is consistent with a discussion of valuation that Buffet published in his 1981

Chairmanrsquos letter to Berkshire Hathaway shareholders applying to a company that pays

out all earnings as dividends The second table presented by Montgomery (2010) is

26

derived from the formula suggested by Richard Simmonsrsquo book ldquoBuffett step-by-step an

investorrsquos workbook ndash learn to analyze and apply the techniques of the master investorrdquo

which applies to a company that retains all earnings Montgomery (2010) states that

individually the formulae are incomplete Applied together however they provide a

practical approach to valuation

While this approach also has flaws such as need for stable economic data as the model

assumes a static return on equity the approach is simple to apply and will generate an

additional figure to the spectrum of values

26 Hypothesis Based on a review of the literature this study aims to expand the field of practical

valuation by applying a range of existing valuation methods in conjunction with the

newly proposed valuation of Montgomery (2010) These methods will be applied to the

Chinese banks chosen for this study that are listed in Chinarsquos developing securities

market

This study hypothesizes that the speculative nature of Chinarsquos security markets

contributes to the under and overvaluation of listed companies

H1 There is a large discrepancy between the listed market price and the intrinsic value of

Chinese banks

In other words state ownership negatively affects the intrinsic value of listed companies

H2 Non-state-owned banks will have an intrinsic value closer to their listed market price

when compared with state-owned banks

27

The following chapter details the methods that were applied for calculating the spectrum

of values and the Chinese banks to be tested in this research

28

III Research Methodology

31 Introduction The objective of this research is to examine valuation results of different approaches in

comparison to listed market prices of the selected Chinese banks in order to test the research

hypotheses The methodology adopted in this paper is eclectic An analysis of the

Chinese banks is a research area where quantitative data are difficult to interpret when

they are available at all Financial data are often incomplete or unclear and this paper

therefore is bound by realistic limits confining itself to a situation where the amount of

data is small yet its significance indefinite

Given Warren Buffettrsquos success as an investor Montgomeryrsquos adaptation derived from

Warren Buffetrsquos use of the Graham and Dodd approach shall be used for the purpose of

this study Therefore a careful consideration of the two approaches proposed by

Montgomery (2010) is required

The asset approach using data from the balance sheet and the market approach using

data gathered from foreign ownership purchases of Chinese banks are only useful as a

starting point and were used to establish a baseline for the value range The valuation

approach proposed by Montgomery (2010) will then be applied to expand the spectrum

of values for each bank This spectrum will then be compared with current market price

of each bank

I hope to produce from these disparate sources a synthesis that draws reliable conclusions

when possible and when not possible marks those areas that invite further research

29

32 Sampling and Data Collection A total of 8 banks listed on the Shanghai Stock Exchange were analyzed These banks

consist of the ldquoBig Fourrdquo state-owned banks Agricultural Bank of China Bank of China

China Construction Bank Industrial and Commercial Bank of China and four non-state-

owned banks Bank of Communications CITIC Bank China Merchants Bank and

Shanghai Pudong Development Bank

Firmsrsquo data on total assets liabilities earnings and other relevant financial data were

extracted and calculated from firmsrsquo annual reports for the year 2010 and for as many

years prior as available Due to some banks such as the Agricultural Bank of China only

publically listing in recent years various financial data is limited If annual reports or

financial data were unavailable attempts were made to source from appropriate financial

databases7

The prices of relevant stocks were extracted from the Shanghai Stock Exchange for the

target banks as of December 31st for each relevant financial year The reason for

establishing the stock price on December 31st is to establish an appropriate comparison of

the year end share price with the intrinsic value formulated from financial data as of

December 31st It is unlikely that all historical stock prices can be extracted Therefore

with these limitations the data is to be collected tested and analyzed according to the

approaches outlined in this chapter

7 For example Reuters Thompsons and Morningstar

30

33 Valuation Models 331 Estimating Target Bankrsquos Value Using the Asset Approach

In the asset approach the value of the target bank is estimated from subtracting all

liabilities from total assets to derive the value of the equity of the bank This determines

the approximate net worth of the company For the purpose of this study it is assumed

that accounting book value is an accurate representation of an assetrsquos value In order for

ease of comparison of price paid per share this final equity amount was divided by the

total shares to create an equity per share amount

332 Estimating Target Bankrsquos Value Using the Market approach The researcher examined foreign ownership stakes in each target bank and based on what

they were paid in each corporate acquisition established an estimate of the value foreign

strategic investors assigned to each bank Browne (2007) suggests that most of the time

such values are close to real worth at the time of the transaction

333 Estimating Target Bankrsquos Value Using the Montgomery Method Montgomery (2010) stresses that one of the most important factors in identifying the

value of a business is its ability to generate profits As such the Return on Equity (ROE)

ratio is selected as a measure of the earning power of a business This is because return

on equity is an indicator of profitability and an ldquoessential ingredient in establishing the

economic performance of the businessrdquo Return on equity is calculated by dividing the

net profit after tax (NPAT) of the company by the average of equity for the last year and

current equity It is important to note that debt can adversely affect this ratio These

figures were extracted from the banksrsquo balance sheets and statements of cash flow

31

Once the ROE has been established a required rate of return must also be established

For the purpose of this study the researcher will adopt an after-tax investorrsquos required

return of 10 as suggested for illustrative purposes by Montgomery (2010)

The researcher will then use these two figures in both Tables 21 and 22 to determine

the appropriate multiplier to apply to each banksrsquo equity per share This will give two

figures corresponding to two valuation scenarios 1) if the bank were to pay out 100 per

cent of their earnings as dividends 2) if the bank were to retain all earnings

Montgomery (2010) states that in the real world most businesses payout a significant

proportion of their earnings and thus fall between the two examples His proposed

solution is to do the following First multiply the result obtained from using Table 21

by the payout ratio8 Second multiply the result obtained from using Table 22 by one

minus the payout ratio The addition of the two results will arrive at an estimated

intrinsic value for the bank

34 Analysis The results from each approach were combined to establish a spectrum of values for each

target bank This value range was then compared to the yearly market price of the listed

banks as of December 31st

341 Hypothesis Testing For each target bank the extracted market prices were compared to the value range The

objective is to determine if the listed market price undervalues overvalues or falls within

the range of values for each target bank If the target price falls outside the value range

then further analysis should be done to determine if a large discrepancy exists This is in

8 Calculated as Dividends per Share divided by Earnings per Share

32

line with the objectives of the research to determine if a large discrepancy exists between

intrinsic value and market price This was examined in light of the first hypothesis

The research will also evaluate the proximity of the non-state-owned banksrsquo intrinsic

value to their listed market price in comparison to that of the state-owned banks This is

in line with the research objective of comparing state-owned banks intrinsic value and

market price and that of the non-state-owned This was examined in light of the second

hypothesis

33

IV Results of the Comparison

41 Introduction This chapter presents the results of the research The first section discusses the

descriptive statistics of Asset Approach data collected in this research This is followed

by the descriptive statistics of the Market Approach data collected and the next section

presents the descriptive statistics of the data sample using the proposed Montgomery

Method

This chapter then discusses the comparisons of the market prices of the Chinese banks

with the results of each valuation method to determine which bankrsquos price lie within or

outside the value range The chapter ends with the results of the hypotheses being tested

and the summary of the findings

42 Descriptive Statistics Asset Approach This section describes the data collected for the Asset Approach The total number of

banks studied is eight The data is collected from companiesrsquo annual reports obtained

from the investor relations section of each banksrsquo websites The annual reports studied in

this research are for the financial data of the year 2010 and for as many years prior as

available

421 Non-State-Owned Banks

The following tables illustrate the total asset and liability data collected for the non-state-

owned banks

34

Table 421-1 Bank of Communications

Bank of Communication

Total Assets Total Liabilities Remaining Equity

Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114

Table 421 illustrates the net worth of the Bank of Communications as increasing

annually As of December 31st 2010 the base value range of the Bank of

Communications is 398 RMB

Table 0-2 CITIC Bank

CITIC Bank Total Assets Total Liabilities Remaining Equity Equity Per Share

2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075

Table 422 illustrates the net worth of the CITIC Bank as increasing annually As of

December 31st 2010 the base value range of the CITIC Bank is 319 RMB

35

Table 0-3 China Merchants Bank

Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251

Table 423 illustrates the net worth of the China Merchants Bank as increasing annually

until 2008 where there was a decline As of December 31st 2010 the base value range

of the China Merchants Bank is 621RMB

Table 0-4 Shanghai Pudong Development Bank

Pudong Development

Bank

Total Assets

Total Liabilities Remaining Equity

Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36

Table 424 illustrates the net worth of the Shanghai Pudong Development Bank as

initially decreasing then a turnaround to increasing annually from 2001 As of December

31st 2010 the base value range of the Shanghai Pudong Development Bank is 859

422 State-Owned Banks Table 422-1 Agricultural Bank of China

Agricultural Bank of China


Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280

Table 425 illustrates the net worth of the Agricultural Bank of China as increasing

annually Prior to publicly listing the bank had a severe problem with Non Performing

Loans (NPLs) which lead to liabilities greater than the assets of the bank creating a

negative equity figure This was rectified prior to the IPO with the assistance of the

Chinese Government 9 As of December 31st 2010 the base value range of the

Agricultural Bank of China is 167RMB

Table 422-2 Bank of China

Bank of China Total Assets Total Liabilities Remaining Equity Equity Per Share

2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125

9 The Ministry of Finance of the Peoples Republic of China established four financial asset management corporations (AMCs) one for each of the four commercial state-owned banks to purchase Non-Performing Loans and thereby improve the banksrsquo balance sheets prior to publicly listing In the case of the Agricultural Bank of China the Great Wall AMC was created

37

Table 426 illustrates the net worth of the Bank of China as increasing annually As of

December 31st 2010 the base value range of the Bank of China is 242RMB

Table 422-3 China Construction Bank

Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101

Table 427 illustrates the net worth of the China Construction Bank as increasing

annually As of December 31st 2010 the base value range of the China Construction

Bank is 280RMB

Table 422-4 Industrial and Commercial Bank of China

ICBC Total Assets Total Liabilities Remaining Equity

Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205

Table 428 illustrates the net worth of the Industrial and Commercial Bank of China as

increasing annually As with the Agricultural Bank of China prior to publicly listing

ICBC had a severe problem with Non Performing Loans (NPLs) which lead to liabilities

38

greater than the assets of the bank creating a negative equity figure This was rectified

prior to the IPO with the assistance of the Chinese Government10 As of December 31st

2010 the base value range of the Industrial and Commercial Bank of China is 235RMB

43 Descriptive Statistics Market Approach This section describes the initial and subsequent public offering issue prices of the

researched Chinese banks and the foreign ownership stakes each banks Where a

substantial ownership stake is found such as a strategic partnership or strategic

investment attempts have been made to discover the price paid at the time of transaction

As mentioned previously one of the disadvantages of this approach includes a lack of

transparency in a transaction Most of the important assumptions that strategic investors

made in purchasing and divestment of their holdings are hidden such as their

expectations of growth in sales or earnings It also lacks flexibility to include unique

operating characteristics of the firm in the value it produces Another potential flaw is

that many foreign ownership transactions occurred in the Hong Kong Stock Exchange

and not the Shanghai Stock Exchange so exchange rate conversions must be made which

may distort the value figure

431 Non-State-Owned

Bank of Communications

HSBC is the sole strategic investor in the Bank of Communications As of January 2005

HSBC purchased an ownership stake of 199 of the Bank of Communications HSBC

held 777 billion shares in the bank purchased for 186 RMB per share 149 times the

10 The Huarong AMC was created to handle assume the non-performing assets primarily NPLs of ICBC

39

companys stated 2004 book value and at a slight premium to the value of the equity per

share

In June 2010 HSBC agreed to subscribe to Bank of Communications new rights issue for

1396802037 H-rights shares at HK$514 per share ( approximately 448RMB per share)

The transaction represented a consideration of approximately HK$7180 million thereby

maintaining HSBCs 199 stake HSBC has yet to divest any shares

CITIC Bank

In 2007 Banco Bilbao Vizcaya Argentaria SA (BBVA) a Spanish based banking group

negotiated to be CITIC bankrsquos sole strategic investor and purchased 483 of CITIC

shares at 342RMB per share This was approximately a 40 discount to the IPO issue

price of 580RMB The IPO value range was set at HK$506-HK$586 while the range

for the Shanghai-listed shares was set between 500RMB to 580 RMB each The shares

were issued pursuant to the anti-dilution rights and top up rights

According to Reuters (Ku 2007) CITIC Bank was forced to lower its maximum issue

price to 275 times its 2007 book value from 281 times as mainland institutional

investors and regulators deemed the valuation too rich Since the bank has been listed in

the Hong Kong Stock Exchange it has performed the poorest among the all ldquoRed Chiprdquo11

financial stocks It dropped below the IPO price HK$580 and closed at HK$579 on 5

June 2007

11 A stock in a company operating in the Peoples Republic of China that trades on the Hong Kong Stock Exchange Generally speaking only Chinese citizens are allowed to invest on Chinese stock exchanges Red chips are therefore separately incorporated in Hong Kong in order to allow foreign investment in Chinese companies The term refers to the color red which is the official color of the Communist party

40

In 2009 BBVA increased its shareholding in the Bank on two consecutive occasions up

to 15 of total shares first up to 1007 on February 2009 and up to 1512 later with

the transaction closing on April 1st 2010 The option was executed at HKD 645 per

share13 a price comparable to that of the initial IPO price

China Merchants Bank

China Merchants Bank initial public offering was 15 billion common shares in RMB (A

Shares) at an issue price of 730RMB per share on Shanghai Stock Exchange on 27

March 2002 The Hong Kong IPO issued 22 billion overseas listed foreign currency

denominated shares (H shares) on 22 September 2006 at HK$855 per share14

There are two foreign ownership stakes in China Merchants Bank The largest is

JPMorgan Chase holding approximately 452 million shares The second is Blackrock

Inc holding 265 million shares However neither has holdings of over 5 of total shares

China Merchants Bank does not have a strategic investor relationship with either foreign

owners Both ownerships trade predominantly in the Hong Kong Exchange and appear to

have no invested commitment to the bank

In March 2010 (Jianxin amp Master 2010) China Merchants Bank set an A-share rights

issue price of 885 RMB per share compared with a closing price of 163 RMB of its A

shares listed on the Shanghai Stock Exchange at the time of announcement

12 By exercising its share option from a Share and Option Agreement entered into on 22 November 2006 13 Approximately 586RMB based on 2009 HKD to RMB exchange rate 22 day average(1 HKD = 0880675 CNY) 14 Approximately 842RMB per share based on September 2006 average exchange rate

41


On September 23 1999 the Shanghai Pudong Development Bank (SPDB) issued

400000000 ordinary shares (Share A) to general public in China with issue price of

1000RMB for each share It has held several capital raisings since this initial IPO

On 23 December 2002 the Company issued additional A share 300 million shares with

an issue price of 845RMB for each share On November 16 2006 the bank issued

additional A share 700 million shares with an issue price of 1364RMB for each A

decade after going public on September 18 2009 the bank issued a further 904 million

non-publicly offered A shares with an issue price of 1659RMB per share

Table 431-1 Summary of SPDB New Shares Issue Prices

Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659

Since 2003 Citibank Overseas Investment Co has held a stake of approximately 5 of

the total share capital of the bank Citibank originally invested 600 million yuan to buy

the five-percent stake in SPDB (approximately 332RMB per share) Every Apr 30 from

2006 to 2008 Citibank had the option to buy SPDB shares from Shanghai State Assets

Managing Co Ltd and Shanghais Jiushi Company and SPDB non-circulating shares

taking its stake in SPDB up to 249 percent However Citigroup has not raised its

ownership stake and in 2006 reduced it slightly to 378 In 2008 SPDB implemented a

profit distribution plan of 4 bonus shares for every 10 shares during the period and

Citibanks percentage holding was further reduced to 339

42

432 State-Owned


In June 2010 Standard Chartered Bank invested US$500 million as a cornerstone

investor in Agricultural Bank of China Limitedrsquos H-Share Initial Public Offering (IPO) in

Hong Kong The two banks signed an agreement to develop new business opportunities

together The consideration was financed from Standard Charteredrsquos internal cash

resources and was for the number of shares with a total value at the offer price of the

Hong Kong dollars equivalent of US$500 million This holding is only 037 of the total

shares however due to the recent timing of the IPO it is unknown if Standard Chartered

has call options or other opportunities to increase its stake at a later date As Standard

Chartered paid the HKD offer price the equivalent 268 RMB offer price is considered

for the value range of the Agricultural Bank of China

Bank of China

In 2005 the Bank of China entered into separate agreements and established strategic

partnerships with the Royal Bank of Scotland Group and its wholly owned RBS banks

and controlled RBS China (together ldquoRBSrdquo) Asia Financial Holdings Pte Ltd15 (AFH)

UBS AG (UBS) and the Asian Development Bank (ADB)

According to the Bank of Chinas 2005 annual report by the end of 2005 RBS held

20942736236 shares accounting for 10 of the Banks total equities AFH held

10471368118 shares or 5 total equity UBS AG held 3377860684 shares or about

16129 equity and the ADB held 506679102 shares approximately 02419 of the

15 It should be noted that the parent company of AFH is Temasek Holdings an investment company wholly owned by the government of Singapore

43

Banks total equities The Bank issued ordinary shares to each strategic investor at

1RMB per share The listed IPO issue price was 308RMB per share

RBS contractual commitment to retain the 426 Bank of China (BoC) stake ended on

31 December 2008 On January 7th and 14th 2009 RBS divested by sale or transfer its

entire stake in Bank of China According the RBS 2009 Annual Report the 426

investment in Bank of China was sold for HKD 184 billion approximately HK$17116

per share

According to UBS 2008 Annual Report in December 2008 UBS disposed of its equity

stake in Bank of China through a placing of approximately 34 billion Bank of China

Limited H-shares to institutional investors for a cash consideration of approximately CHF

887 million (HKD 6519 million) The sale values each share at approximately 193HKD

or about 170RMB

China Construction Bank

According to China Construction Bankrsquos 2005 Annual Report the Bank entered into

strategic investment and cooperation agreements with Bank of America Corporation

(lsquolsquoBank of Americarsquorsquo) on 17 June 2005 and an investment agreement with Asia Financial

Holdings Pte Ltd (lsquolsquoAFHrsquorsquo) on 1 July 2005

According to Bank of Americarsquos 2005 Annual Report on June 17 2005 Bank of

America committed to purchase approximately nine percent of the stock of China

Construction Bank (CCB) for $30 billion The initial purchase of CCB shares for $25

billion in August 2005 and during CCBrsquos initial public offering in October 2005 made an

16 Approximately 155RMB per share

44

additional purchase of $500 million As the float on the Hong Kong stock exchange had

an issue price of HK$235 per share (approximately 225RMB per share) it is calculated

that initial purchase of CCB shares was between 084 and 086RMB per share17

According to CCBrsquos 2008 Annual Report on 25 September 2007 the Bank issued 9

billion A-shares in its domestic IPO at an issuance price of 645RMB

According to CCB and Bank of Americarsquos 2008 Annual Reports in 2008 in accordance

with the Share Purchase and Options Agreement signed by Huijin18 and Bank of America

Bank of America exercised its call options in July and November 2008 acquiring

6000000000 H-shares and 19580153370 H-shares of the Bank respectively from

Huijin purchasing 256 billion common shares for approximately $92 billion paying

approximately 297RMB per share In addition in January 2009 Bank of America sold

56 billion common shares of their initial investment in CCB for $28 billion for

approximately 414RMB per share Later in 2009 Bank of America sold 191 billion

common shares representing their entire initial investment in CCB for $101 billion

approximately 438RMB per share

The other significant foreign shareholder of CCB is Temasek who now holds its shares in

the investment vehicle Fullerton Financial a wholly owned subsidiary of Temasek

Holdings They have not altered their ownership stake since the initial IPO The details

of their purchase conditions are not publicly available

17 Allowing for fluctuations in exchange rates dating back to the dates of the IPO 18 State-owned holder of the majority of CCBrsquos ordinary shares

45

Industrial and Commercial Bank of China

On 27 January 2006 the Bank entered into share purchase agreements with three foreign

strategic investors namely Goldman Sachs Allianz and American Express Goldman

Sachs Allianz and American Express subscribed for 16476014155 shares

6432601015 shares and 1276122233 shares newly issued by the Bank on 28 April

2006 for a consideration of USD 25822 million EUR 8247 million and USD 200

million respectively (on the basis of an agreed exchange rate of USD1 to RMB 80304

and EUR 1 to RMB 98167) Each investor paid 126RMB per share

On 29 June 2006 SSF19 subscribed for 14324392623 shares newly issued by the Bank

for a consideration of approximately RMB 18 billion or 126RMB per share

On 27 October 2006 Industrial and Commercial Bank of China Limited was

concurrently listed in Shanghai and Hong Kong The offering prices for A-shares and H-

shares were RMB 312 and HKD 307 per share The offering prices for A-shares and H-

shares were essentially the same having taken currency conversion into account

According to the joint press release by Industrial and Commercial Bank of China (ICBC)

and Allianz Group (Allianz) issued on March 25 2009 Allianz sold 3216300507 ICBC

H shares representing the shares that have become free from lock up on April 28 2009

to a select group of investors through a private sale for a sale price of 386 HKD per

share20 Allianz continues to hold 3216300508 H shares in ICBC

On the same date at the end of their lock-up period American Express also sold almost

half of their ownership stake approximately 63806 million shares also at HK$ 386 a 19 The National Social Security Fund (SSF) is a fund set up by the PRC government to provide social security for the nationrsquos aging population and to support economic development and social stability 20 Between 338 and 340RMB per share

46

share through private sales At the end of September 2010 Goldman Sachs sold 304

billion ICBC shares at HK$ 57421 each

According to the ICBCrsquos 2010 Annual Report in November 2010 the Bank implemented

a rights issue of A shares and H shares The rights issue was conducted on the basis of

045 rights shares for every 10 existing shares with the same basis adopted for the rights

issue of A-shares and H-shares The subscription prices were RMB 299 per A rights

share and HK$ 349 per H rights share which were the same after exchange rate

adjustment

The subscription price per A rights share of RMB 299 represented a discount of

approximately 369 to the closing price of RMB 474 per A share as quoted on

Shanghai Stock Exchange (SSE) on the price determination date (10 November 2010 the

date on which the subscription price for the rights issue was determined) while the

subscription price per H rights share of HK$ 349 represented a discount of

approximately 474 to the closing price of HK$663 per H share as quoted on SEHK on

the price determination date

44 Descriptive Statistics Montgomery Method The following section outlines the estimated Intrinsic Value (IV) calculated using the

Montgomery Method and is based on financial data as of December 31st gathered from

the banksrsquo annual reports The IV is then compared with the listed share price for each

bank as of December 31st for each year


47

441 Non-State-Owned For the purpose of comparison of non-state-owned banks with a long standing publicly

listed bank the estimated intrinsic values of HSBC22 have been included in the following

table This creates a reference benchmark of a non-Chinese bank

Table 441-1 Comparison of Non-State-Owned Bankrsquos Montgomery Intrinsic Value

HSBC23 Bank of

Communication CITIC Bank Merchants

Shanghai Pudong

Development Bank

IV Share Price IV Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975

As shown in Table 441 the banksrsquo intrinsic values are generally rising over time and

share price is decreasing leading to a convergence between the two It should be noted

that the Chinese banks began with high share prices which fluctuated significantly In

2008 across the board all banks drastically increased net profits after tax (NPAT) This

created a spike in intrinsic value for some banks however these increases were not

sustained and hence intrinsic value dropped the following year One exception to this

appears to be the Bank of Communications which has maintained a stable and steadily

rising intrinsic value

22 HSBCrsquos financial data is reported in US dollars 23 As with most global banks it appears HSBCrsquos intrinsic value was impacted in the years of the GFC

48

442 State-Owned For the purpose of comparison of state-owned banks with a long standing publicly listed

bank the estimated intrinsic values of HSBC24 have been included in the following table

Table 442-1 Comparison of State-Owned Bankrsquos Montgomery Intrinsic Value

HSBC Agricultural Bank of China Bank of China

China Construction Bank ICBC

IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐

As shown in Table 442 the intrinsic value of the state-owned banks has risen every year

and appears to be far more stable than that of the non-state-owned banks As with the

non-state-owned banks upon listing with the exception of the Agricultural Bank of

China each bank had a share price well above that of the estimated intrinsic value Over

time the share price has moved to converge with estimated intrinsic value

45 Market Price Comparison with Value Range The results from each approach were combined to establish a spectrum of values for each


banks as of December 31st to determine if the market price falls within or outside the

estimated value range

24 HSBCrsquos financial data is reported in US dollars

49

451 Non-State-Owned Table 451-1 Bank of Communications


Asset Market Montgomery IV

Dec 31st Share Price

6 Month Average Share

Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114

The Bank of Communications share price falls within the established value range As of

December 31st 2010 the share price appears to be at a discount to its estimated intrinsic

value


CITIC Bank Asset Market Montgomery IV


2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111

The CITIC Bank share price falls within the established value range As of December

31st 2010 the share price appears to be at a discount to its estimated intrinsic value

50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362

The China Merchants Bank share price has fluctuated greatly Some years the share price

is outside the valuation range other years within the established value range As of


value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51

As with the China Merchants Bank the Shanghai Pudong Development Bank share price

has fluctuated greatly Initially the share price lay outside the value range and over time

decreased to converge with intrinsic value However in the volatile years surrounding the

GFC the share price jumped and then it appears that intrinsic value has risen rapidly till

the share price now falls with the value range As of December 31st 2010 the share price

appears to be at a discount to its estimated intrinsic value

452 State-Owned Table 452-1 Agricultural Bank of China




2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080

As the Agricultural Bank of China listed recently there is no longitudinal data for

comparison Initially the share price lay within the value range As of December 31st

2010 the share price appears to be at a discount to its estimated intrinsic value


Bank of China Asset Market Montgomery IV


2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52

The Bank of China share price has fluctuated less than that of the non-state-owned banks

Initially the share price lay outside the valuation range however over time gradually

converging to within the established value range As of December 31st 2010 the share

price appears to be at a discount to its estimated intrinsic value






Price

2010 280 826 459 485

2009 sale 239 438 768 619 647

January 2009 sale 414

2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189

June 2005 ‐ Pre IPO 084 ~086RMB

The China Construction Bank share price was initially greater than the estimated intrinsic

value range As with other banks it appears the share price gradually converges to within

the established value range As of December 31st 2010 the share price appears to be at a

discount to its estimated intrinsic value


ICBC Asset Market Montgomery IV


2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53

The Industrial and Commercial Bank of China share price was initially greater than the

estimated intrinsic value range As with other banks it appears the share price gradually

converges to within the established value range As of December 31st 2010 the share


46 Macro Economic Factors It is important to consider the macro-economic factors that may have influenced the

results of this study Economic performance of the Chinese banks may have been

impacted in several ways by the global financial crisis Several of the Chinese banks

strategic investors were also impacted in particular the Royal Bank of Scotland and

Citibank

Bank of Communications appears to be the most stable of the non-state-owned banks and

their strategic investor HSBC has maintained its ownership stake without divesting any

shares However it is surprising that BBVA has increased their stake in CITIC Bank

threefold the reasons for this are unknown The researcher posits that due to BBVArsquos

strategic aim to grow business within the Asian market and CITIC Bankrsquos strategic aim

to grow their business in South America BBVA has a long term vision of cooperation

with CITIC Bank However this cannot be known for certain Citibank was seriously

affected by the global financial crisis and so it is not surprising that they did not take

advantage of their option to raise their stake in Shanghai Pudong Development Bank to

249 and their ownership stake has been diluted by capital raisings

54

While Standard Chartered has become a cornerstone investor in the Agricultural Bank of

China its ownership stake is conspicuously small at 037 this may illustrate a lack of

commitment to the holding It remains to be seen whether the bankrsquos relationship will

grow and develop into something more than a cornerstone investor On the world scale

UBS and RBS suffered severe financial losses during the GFC and in 2009 sold their

complete stake in Bank of China in order to bolster their balance sheets It is unknown if

they would have maintained their ownership stakes without the consequences of the crisis

on their financial standings

Similarly Allianz American Express and Goldman Sachs all chose to take profits and

reduce their stake holdings in ICBC however they still retain approximately half their

previous holdings Bank of America seems to have profited the most as they took

advantage of their call options to double their ownership stake in November of 2008 and

then a few months later in January 2009 they sold their original stake at nearly four times

the initial price paid

47 Results of Hypothesis Testing Based on the results the hypotheses stated for the research are tested The first hypothesis

proposes that the speculative nature of Chinarsquos security markets contributes to the under

and overvaluation of listed companies The second hypothesis proposes that the state

ownership negatively affects the intrinsic value of listed companies

H1 states that there is a large discrepancy between the listed market price and the intrinsic

value of Chinese banks The results earlier indicate support of H1 for non-state-owned

banks as shown in Figure 46-1 The volatility of the share price creates a large

discrepancy between listed market price and estimated intrinsic values The state-owned

55

banks intrinsic values and listed market prices appear to be more stable and as such the

results indicate the discrepancy between the two is not large as shown in Figure 46-2

Therefore for non-state-owned banks H1 is supported

H2 states that non-state-owned banks will have an intrinsic value closer their listed

market price when compared with state-owned banks The results earlier indicate that the

non-state-owned banks share price is far more volatile than that of the state-owned banks

The results suggest that the estimated intrinsic value of the state-owned banks has grown

more stably and is closer to their listed market price compared with non-state-owned

banks As such the results do not appear to support this hypothesis Possible

explanations of these results will be discussed in the concluding chapter

Figure 47-1 Comparative discrepancy between market price and intrinsic value of non-state-owned banks

‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010

Estimated Intrinsic Value

Maket Share Price

Merchants IV Bank of Communication IV

CITIC Bank IV Pudong IV

Bank of Communication Share Price CITIC Bank Share Price

Merchants Share Price Pudong Share Price

56

Figure 47-2 Comparative discrepancy between market price and intrinsic value of state-owned banks

48 Summary of Findings Based on the exploratory results compiled the important findings are summarized in this

section

The fluctuations in performance indicated by the results suggests that non-state-owned

banks appear to compete in a separate highly competitive market to that of the big four

state-owned banks This is in line with the finding of Garcia-Herrero et al (2006) that

suggests direct competition among the largest banks is weak due to several factors First

the price and quantity controls imposed by the government have not been fully lifted and

the opening up to foreign competition has proceeded cautiously Foreign competition is

limited to the wholesale business and in few areas Second Chinarsquos fast economic growth

and in particular the high investment rate implies that there is an enormous amount of

projects which need to be financed Thus there is room for all the banks to make business

‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price

Agricultural Bank of China IV Bank of China IV

China Construction Bank IV ICBC IV

Agricultural Bank of China Share Price Bank of China Share Price

ICBC Share Price China Construction Bank Share Price

57

Finally the excessive liquidity of the banking system inhibits competition so even the

programmed full liberalization of the deposit rate might not increase competition in this

setting (Garcia-Herrero et al 2006)

The fluctuation of non-state-owned banks supports the view that the speculative nature of

the Chinese securities markets contributes to the under and over valuation of its listed

companies

The research results indicate that the market price is frequently out of line with the

estimate intrinsic value and second that there seems to be an inherent tendency for these

disparities to correct themselves It can be assumed that throughout these periods

investors fall prey to their emotions and as a group may decrease a stock price below

intrinsic value during market pessimism Conversely stock prices appear to increase to

levels above intrinsic value upon market optimism Non-state-owned banks seem to

fluctuate so much that it is uncertain whether any convergence would be statistically

significant State-owned convergence is more likely to be significant

Graham (2003) and Montgomery (2010) assert that in the short run stock markets are in

essence a voting machine whereon countless individuals register choices which are the

product partly of reason and partly of emotion with voting requiring only money not

intelligence or emotional stability However they also stress that in the long term the

market is a weighing machine and therefore share price performance eventually reflects

the economic performance of the underlying business whereby over time price will

reflect the direction of intrinsic value

58

V Research Findings and Conclusions

51 Introduction This section discusses the research findings on valuation range estimated through the use

of the Asset Approach Market Approach and the Montgomery Method This is followed

by discussion of the implication and the limitations of the research Recommendations for

future research are presented and finally this is followed by the conclusion of the paper

52 Considerable Differences Among Various Evaluations The objective of the study is to examine whether the developing securities markets of

China undervalue or overvalue member banks by measuring indicators of profitability

and growth such as Return on Equity illustrating how efficiently bank management

allocates capital and thereby allowing an estimate of their intrinsic values in comparison

to their listed market prices

In studying the financial data from each bankrsquos annual reports the research evaluated the

companies according to three methods a calculated equity per share a spot price paid for

shares by foreign investors and an estimated intrinsic value For each method the

research further conducted a comparison between the valuation range and year-end

market share price

The new valuation method proposed by Roger Montgomery and used by this research

indicates a different value investing philosophy with a value estimate significantly

different from other valuation methods results indicated within the table series 451 and

452 Therefore the research sheds more light on the comparable value of the Chinese

banks and shows a more complete picture of these banks in depth

59

It is suggested that one reason for the stability of the state-owned banks in comparison

with the non-state-owned banks is the capital inflows from the PRC government The

economic performance of all four state-owned banks was significantly improved due to

the creation of four asset managing companies to purchase non-performing assets and

remove them from the banksrsquo balance sheets

53 Research Implications The results of this research support partially the first hypothesis put forward in chapter II

which indicates that there is a large discrepancy between Chinese banks intrinsic values

and their listed share prices However the research does not support the second

hypothesis that non-state-owned banks will have an intrinsic value closer to their listed

market price when compared with state-owned banks was not upheld

This research contributes to the understanding of Chinese banks as a hot area of emerging

economies and transitory economies As indicated by the comparative case of HSBC this

research also makes its contribution to the evaluation of bank performance in a developed

economy

54 Limitations of the Research While focusing on the developing securities markets of China most foreign ownership

transactions occurred in the Hong Kong Stock Exchange It is suggested for future

research to study the robustness of the valuation methods against a larger sample of the

Chinese banks This research only applies the valuation methods to the banks with a

limited time series data Therefore the results may not be significant enough to indicate

any strong trend for these banks This may explain some of the volatile statistics that

were found by the research Larger sample sizes and longer time periods may lead to a

60

more concrete conclusion of whether the valuation ranges are optimal in estimating

intrinsic value It is recommended that future research test the results against a larger

group of comparable companies

In order for a fair estimate of intrinsic value the Montgomery Method requires a strong

competitive advantage of the targeted company in order to maintain stable returns on

equity and little or no debt as high levels of borrowing can make return on equity look

artificially good Due to their size and established brand it seems the four Chinese state-

owned banks have a strong competitive advantage over the non-state-owned banks The

most valuable competitive advantages are those that allow a company to raise service

fees or charges each year Montgomery (2010) states ldquoa continuous emotional attachment

to the brandproduct or servicerdquo provides that ability Given the government regulation

controlling the banking sector it is worth noting that the inability of banks (state and non-

state owned) to adjusted their fees independently may have long term effects on their

profitability

This research has focused primarily on quantitative factors effecting intrinsic value

However it does not take into account issues such as convertible bonds and the debt

levels of the banks Other qualitative factors of value such as brand names corporate

governance management and so forth have not been evaluated in terms of their affect on

intrinsic value

55 Recommendations for Future Research This study utilizes the data available in annual reports in its valuation method However

aggregated analystsrsquo predicted future earnings of listed companies could potentially be

used to estimate future intrinsic values Therefore it is suggested to study the effects of

61

estimated future intrinsic value in a longitudinal study Montgomery( 2010) posits that

over the long term prices converge with intrinsic value So a longitudinal study over an

extended period could test the correlation between estimated intrinsic value and market

share price This has the potential to become an important parameter of corporate growth

As this research only studies the banks listed in China specifically the Shanghai Stock

Exchange it is suggested for future works to examine whether the results still hold when

conducted in other countries And in the case of China a comparison between Shanghai

and Hong Kong exchanges could be examined for example an analysis of the price

value differences of dual listed companies between the Hong Kong Stock Exchange and

Shanghai Stock Exchange

The Montgomery Method can be enhanced by the addition of qualitative factors and

measuring the influence of them on intrinsic value Finally a study of applying different

levels of the required return to generate a valuation range and a margin of safety as

described by Graham et al (1988) and Montgomery (2010)

56 Conclusions The timing of the research is significant as ten years prior the Chinese banks had

numerous performance problems such as NPLs which drastically reduced their value

Five years prior there was limited financial data available for estimating the value of the

Chinese banks This research was lucky in its timing as the banks have been through a

transitionary aspect of the economy and have begun adapting to the nature of a market

economy

62

As various valuation methods are practiced by financial analysts in valuing companies

this study contributes an additional method the Montgomery Method The research also

hopes to encourage more studies in Graham-style valuing of firms and utilizing the best

methods in valuing companies

Value can change due to various factors such as political economic societal and

technological factors including the valuation methods used Just because a companyrsquos

share price is lower than the estimated valuation does not mean the price will go up

Conversely a price that is well above the estimated valuation doesnrsquot mean the share

price is going to fall The idea is not to be perfect but to protect capital and do better than

the market Investment behavior should not be price-driven but value-driven

Therefore it can be concluded that the combined valuation methods and valuation range

used in this research provide a much better reference base to compare with price This

comparison can then be used to base an investment decision to buy sell or hold It is thus

hoped that a more effective methodology is then derived for industry practice in the

future

63

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httpwwwabchinacomenabout-usannual-report

Allen F Qian J Zhang C amp Zhao M (2010) Chinas Financial System

Opportunities and Challenges Capitalizing China Conference Boston Boston College

American Institute of Certified Public Accountants (2001) International Glossary of

Business and Valuation Terms Business Valuation Resources LLC

Asprem M (1989 September) Stock Prices Asset Portfolios and Macroeconomic

Variables in Ten European Countries Journal of Banking amp Finance

Asquith P Mikhail M B amp S A (2004 February 15) Information Content of Equity

Analyst Reports Journal of Financial Economics



Bank of China (2005-2010) Annual Reports Retrieved from

httpwwwboccneninvestorir3

Bank of Communications (2005-2010) Annual Reports Retrieved from

httpwwwbankcommcomBankCommSiteeninvest_relationcompany_developjspty

pe=report

64

Barker R (1999) Survey and market-based evidence of industry-dependence in

analysts preferences between the dividend yield and price-earnings ratio valuation

models Journal of Business Finance and Accounting

Barker R (1999) The role of dividends in valuation models used by analysts and fund

managers European Accounting Review

Berger A N Hasan I amp Zhou M (2008) Bank Ownership and Efficiency in China

What will Happen in the Worlds Largest Nation Journal of Banking amp Finance

Berk J amp DeMarzo P (2007) Corporate Finance Boston Pearson Education Inc

Bradshaw M T (2002 March) The Use of Target Prices to Justify Sell-Side Analysts

Stock Recommendations Accounting Horizons

Brandt L amp Rawski T G (2008) Chinarsquos Great Economic Transformation

Cambridge University Press

Browne C (2007) The Little Book of Value Investing Hoboken John Wileyamp SonsInc

Buffett W (1976 November December) Benjamin Graham Financial Analyst

Journal

Buffett W (1977 - 2009) Chairmans Letter Berkshire Hathaway

Buffett W (1984) The Superinvestors of Graham-and-Doddsville Hermes the

Columbia Business School Magazine

Bulmash S B amp Trivoli G W (Summer 1991) Time-Lagged Interactions Between

Stock Prices and Selected Economic Variables Journal of Portfolio Management

65

Chen N-F Roll R amp Ross S A (1986 July) Economic Forces and the Stock Market

The Journal of Business

Cheung Y-W amp Ng L K (1998) International evidence on the stock market and

aggregate economic activity Journal of Empirical Finance

China CITIC Bank (2007-2010) Annual Reports Retrieved from

httpbankeciticcominvestorrelationenglishfinancehtml

China Construction Bank (2004-2010) Annual Reports Retrieved from

httpwwwccbcomeninvestorannalshtml

China Merchants Bank (2006 - 2010) Annual Reports Retrieved from

httpenglishcmbchinacomcmbirenintroaspxtype=report

CITIC Bank (2007-2010) Annual Reports Retrieved from


Damodaran A (1994) Damodaran on Valuation Security Analysis for Investment and

Corporate Finance Wiley amp Sons

Damodaran A (2005 June 14) Valuation Approaches and Metrics A Survey of the

Theory and Evidence Foundations and Trends in Finance

Economist (2010 February 4) Chinas Financial System Red Mist The Economist

Ezrati M (2010) Can China Become the Worlds Engine for Growth The International

Economy

Fama E F (1990) Stock prices expected returns and real activity Journal of Finance

66

Fama E F (1981) Stock prices real activity inflation and money American Economic

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Fama E F amp French K R (1989) Business conditions and expected returns on stocks

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Fama E F amp French K R (2007) The Anatomy of Value and Growth Stock Returns

Financial Analysts Journal

Garciacutea-Herrero A Gavilaacute S amp Santabaacuterbara D (2006 June) Chinas Banking Reform

An Assessment of its Evolution and Possible Impact CESifo Economic Studies

Graham B (2003) The Intelligent Investor - 4th Revised Edition New York Harper

Collins

Graham B Dodd D L Cottle S Murray R F amp Block F E (1988) Security

Analysis (5th Edition ed) New York McGraw-Hill

Hamlin K amp Yanping L (2010 August 16) China overtakes Japan as Worlds second-

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Healy P M amp Palepu K G (2003) The Fall of Enron Journal of Economic

Perspectives (Spring )

Hitchner J R (2003) Financial Valuation Applications and Models Hoboken New

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Ho C-T amp Wu Y-S (2006) Benchmarking performance indicators for banks

Benchmarking An International Journal

67

Industrial and Commercial Bank of China (1998-2010) Annual Reports Retrieved from

httpwwwicbc-

ltdcomicbcltdinvestor20relationsfinancial20informationfinancial20reports

Jianxin L amp Master F (2010 March 1) China Merchants Bank launches $32 bln

rights issue Reuters

Kang J Liu M-H amp Ni S X (2002) Contrarian and momentum strategies in the

China stock Pacific Basin Finance Journal

King A M (2010 January February) Valuation Reports - Precision versus

Uncertainties Valuation Strategies

Ku D (2007 April 20th) Reuters Retrieved March 9th 2011 from

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Liu M-H amp Shrestha K M (2008) Analysis of the long-term relationship between

macro-economic variables and the Chinese stock market using heteroscedastic

cointegration Managerial Finance

Lokey O K amp Masson R (1987 July) Evaluating the Closely Held Business

Management Review

Mandelker G amp Tandon K (1985 Jun) Common stock returns real activity money

and inflation Some international evidence Journal of International Money and Finance

McGuigan J R Moyer R C amp Harris F H (2007) Managerial Economics

Applications Strategies and Tactics Stamford Connecticut Cengage Learning

68

Montgomery R (2010) Valueable how to value the best stocks and buy them for less

than theyre worth (1st Edition ed) Melbourne My 2 Cents Worth Publishing

Mukherjee T K amp Naka A (1995) Dynamic relations between macroeconomic

variables and the Japanese stock market an application of a vector error correction model

Journal of Financial Research

Nielsen G L amp Hudson D H (1987 February) How to Value an Accounting Practice

The National Public Accountant

Pratt S Reilly R amp Schweihs R (2000) Valuing a Business (4 ed Ed) McGraw

Hill

Sargent M A (2008) Greed 101 Commonweal

Schwert G W (1990) Stock returns and real activity a century of evidence Journal of

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Shanghai Pudong Development Bank (1999-2010) Annual Reports Retrieved from

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Thavikulwat P (2004) Determining the value of a firm Developments in Business

Simulation and Experiential Learning

Wang F amp Xu Y (2004 November December) What Determines Chinese Stock

Returns Financial Analysts Journal

Wei L amp Corkery M (2008 September 17th) After Lehman Banks Jettison

Commercial-Property Debt The Wall Street Journal

69

Wen L (2008) The Accounting and Financial Performance of Non-State-Owned

Chinese Commercial Banks Journal of Performance Management

Westort P Kashian R amp Cummings R (2010) Does ownership form in community

banking impact profitability Managerial Finance

Wong S M (2006) Chinas Stock Market A Marriage of Capitalism and Socialism

Cato Journal

Wu H-L amp Chen C-H (2010 Fall) Operational Performance of Commercial Banks

in the Chinese Transitional Economy Journal of Developing Areas

70

Appendix

Table 21 Multiplier Selection when a Company Pays Out 100 percent of its Earnings

Companys Return on Equity

Investors Required Rate of Return After‐Tax

8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71

Table 22 Multiplier Selection when a Company Retains 100 percent of its Earnings



8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

i

Abstract This research is motivated by the importance of valuing firms or equity Without an

assessment of value price dictates an investorrsquos view of worth An estimated value

creates a reference point in which to compare with price This comparison can then be

used to base an investment decision to buy sell or hold The aim of this paper is to

examine valuation techniques with a focus on a practical issue of creating a valuation

range rather than a single lsquoprecisersquo number This study is the first to examine the

practical application of the Montgomery Method of valuing a company

KEY WORDS Value Investing Benjamin Graham Valuation Montgomery Method

ii











iii


Acknowledgements ii

List of Tables vi

List of Figures vii

I Introduction 1















221 Market Value 15

222 Fair Value 15

223 Book Value 15








iv





252 Valueable 25

26 Hypothesis 26


31 Introduction 28






34 Analysis 31



41 Introduction 33






432 State-Owned 42



442 State-Owned 48



452 State-Owned 51




v


51 Introduction 58





56 Conclusions 61


Appendix 70

vi




















vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

ii











iii


Acknowledgements ii

List of Tables vi

List of Figures vii

I Introduction 1















221 Market Value 15

222 Fair Value 15

223 Book Value 15








iv





252 Valueable 25

26 Hypothesis 26


31 Introduction 28






34 Analysis 31



41 Introduction 33






432 State-Owned 42



442 State-Owned 48



452 State-Owned 51




v


51 Introduction 58





56 Conclusions 61


Appendix 70

vi




















vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

iii


Acknowledgements ii

List of Tables vi

List of Figures vii

I Introduction 1















221 Market Value 15

222 Fair Value 15

223 Book Value 15








iv





252 Valueable 25

26 Hypothesis 26


31 Introduction 28






34 Analysis 31



41 Introduction 33






432 State-Owned 42



442 State-Owned 48



452 State-Owned 51




v


51 Introduction 58





56 Conclusions 61


Appendix 70

vi




















vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

iv





252 Valueable 25

26 Hypothesis 26


31 Introduction 28






34 Analysis 31



41 Introduction 33






432 State-Owned 42



442 State-Owned 48



452 State-Owned 51




v


51 Introduction 58





56 Conclusions 61


Appendix 70

vi




















vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

v


51 Introduction 58





56 Conclusions 61


Appendix 70

vi




















vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

vi




















vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

vii




owned banks 56

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

1

I Introduction


















Chinese economy


2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

2






















3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

3





















4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

4







transparent







markets






5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

5






companies




of this research










5 Data Analysis


6 Test Hypothesis



6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

6


recommendations

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

7



















8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

8






















9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

9





















10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

10






















11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

11






















profitable

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

12























13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

13



as China


















14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

14


















Market Value

Fair Value

Book Value

Investment Value

Intrinsic Value

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

15







(2001)









(2001)





16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

16








investmentrdquo














17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

17



value for a company







Graham who said












18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

18



















financials



19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

19





















Block 1988)

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

20























21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

21



Income Approach

Market Approach

Asset Approach





cons of each method




Hudson 1987)







22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

22























23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

23







may be involved















24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

24









aspect in the study













25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

25






















26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

26













market




Chinese banks




27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

27



28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

28


















of each bank



29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

29











databases7









30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

30




















31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

31






















32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

32







hypothesis

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

33






Method









available



owned banks

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

34




Equity Per Share

2010 3951593 3727936 223657 398

2009 3309137 3144712 164425 336

2008 2682947 2532852 150095 306

2007 2110444 1977123 133321 272

2006 1719483 1628988 90495 198

2005 1423439 1340293 83146 182

2004 1144005 1091902 52103 114






2010 2081314 1956776 124538 319

2009 1776276 1668023 108253 277

2008 1319570 1190196 129374 331

2007 1011186 927095 84091 215

2006 706723 675029 31694 102

2005 594602 571377 23225 075



35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

35


Merchants Bank


Equity Per Share

2010 2402507 2268501 134006 621

2009 2067941 1975158 92783 485

2008 1571797 1492016 79781 542

2007 1310964 1242568 68396 465

2006 934102 878942 55160 375

2005 734613 708615 25998 251





Pudong Development

Bank

Total Assets


Equity Per Share

2010 2191411 2068131 123280 859

2009 1622718 1554631 68087 771

2008 1309425 1267724 41702 737

2007 914980 886682 28298 650

2006 689358 664638 24720 625

2005 573523 557553 15969 408

2004 455532 442022 13510 345

2003 371057 359046 12011 307

2002 279301 271340 7960 220

2001 173691 166624 7067 293

2000 111591 109197 2394 099

1999 103210 95434 7776 323

1998 84926 81671 3255 162

1997 81496 67908 13589 676

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

36







Equity Per Share

2010 10337406 9795170 542236 167

2009 8882588 8539663 342925 132

2008 7014351 6723810 290541 112

2007 5305506 6033111 ‐727605 ‐280









2010 10459865 9783715 676150 242

2009 8748177 8206549 541628 213

2008 6951680 6461793 489887 193

2007 5991217 5540560 450657 178

2006 5327653 4914697 412956 163

2005 4740048 4484529 255519 122

2004 4270443 4037705 232738 125


37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

37




Construction Bank


Equity Per Share

2010 10810317 10109412 700905 280

2009 9623355 9064335 559020 239

2008 7555452 7087890 467562 200

2007 6598177 6175896 422281 181

2006 5448511 5118307 330204 147

2005 4585742 4298065 287677 128

2004 3909920 3714369 195551 101



Bank is 280RMB



Equity Per Share

2010 13458622 12636965 821657 235

2009 11785053 11106119 678934 203

2008 9757146 9150516 606630 182

2007 8683712 8140036 543676 163

2006 7508751 7037750 471001 141

2005 6456131 6196255 259876 105

2004 5069324 5577369 (508045) ‐205




38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

38
















431 Non-State-Owned






39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

39


share





CITIC Bank












June 2007


40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

40




















41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

41











Year Price (RMB)

September 1999 1000

December 2002 845

November 2006 1364

September 2009 1659










42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

42

432 State-Owned












Bank of China










43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

43







per share





or about 170RMB











44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

44





















45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

45






















46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

46








adjustment













47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

47





HSBC23 Bank of


Shanghai Pudong

Development Bank


Share Price IV

Share Price IV

Share Price

2010 587 1025 1221

556

999

525

2449

1281

2904

1239

2009 384 1153 1002

935

383

823

1458

1805

3807

2169

2008 586 875 824

474

446

386

2980

1216

6776

1325

2007 2023 1689 649

1562

447

1015

2265

3963

2153

5280

2006 1744 1830 381

‐

152

‐

678

1636

1243

2131

2005 1819 1606 262

‐

111

‐

362

‐

1042

975










48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

48






IV Share Price IV

Share Price IV

Share Price IV

Share Price IV

Share Price

2010 587 1025 498

268 543

323

826

459 846

424

2009 384 1153 399

270 367

433

768

619 575

544

2008 586 875 032 ‐ 326

297

566

383 521

354

2007 2023 1689 ‐ 080 ‐ 301

661

359

985 411

813

2006 1744 1830 ‐ ‐ 292

543

293 254

620

2005 1819 1606 ‐ ‐ 147

189

‐ 154

‐











49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

49






Price

2010 398 448 1221 556 601

2009 336 1002 935 1070

2008 306 824 474 787

2007 272 649 1562 1183

2006 198 381

2005 ‐ Jan Pre‐IPO 182 186 262

2004 114 114



value




2010 319 999 525

2009 277 586 383 823

2008 331 446 386

2007 215 342 447 1015

2006 102 152

2005 075 111



50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

50





2010 621 2449 1281

2009 485 1458 1805

2008 542 2980 1216

2007 465 2265 3963

2006 375 678 1636

2005 251 362




value





2010 859 2904 1239

2009 771 3807 2169

2008 737 6776 1325

2007 650 2153 5280

2006 625 1243 2131

2005 408 1042 975

2004 345 672 700

2003 307 332 592 1053

2002 220 231 986

2001 293 293 1569

2000 099 276 2075

1999 323 ‐879 2475

1998 162 560 000

1997 676 146 000

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

51











2010 167 268 498 268

2009 132 399

2008 112 032

2007 ‐280 ‐080







2010 242 543 323

2009 213 155 367 433

2008 193 170 326 297

2007 178 301 661

2006 163 308 292 543

2005 122 100 147

2004 125 000

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

52










Price

2010 280 826 459 485

2009 sale 239 438 768 619 647


2008 purchase 200 297 566 383 577

2007 181 359 985

2006 147 293

2005 128 225 189









2010 235 846 424

Sept 2010 sale 501

2009 203 575 544

March 2009 sale 338 ~ 340

2008 182 521 354

2007 163 411 813

2006 141 312 254 62

2006 ‐ Pre IPO 126

2005 105 154

2004 ‐205 000

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

53









Citibank











54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

54























55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

55












‐

1000

2000

3000

4000

5000

6000

7000

8000

‐

1000

2000

3000

4000

5000

6000

2005 2006 2007 2008 2009 2010


Maket Share Price





56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

56



section










‐

200

400

600

800

1000

1200

‐

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Estimated In

trinsic Value

Market Share Price





57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

57






companies
















58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

58















market share price






59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

59














economy








60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

60














profitability





intrinsic value




61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

61




















economy

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

62















future

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

63


















pe=report

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

64















Journal






65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

65



















Economy


66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

66


Review








Collins











67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

67


httpwwwicbc-














Management Review





68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

68









Hill



Finance









69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

69






Cato Journal



70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

70

Appendix




8 9 10 11 12 13 14

500 0625 0556 0500 0455 0417 0385 0357

725 0938 0833 0750 0682 0625 0577 0536

1000 1250 1111 1000 0909 0833 0769 0714

1250 1563 1389 1250 1136 1042 0962 0893

1500 1875 1667 1500 1364 1250 1154 1071

1725 2188 1944 1750 1591 1458 1346 1250

2000 2500 2222 2000 1818 1666 1538 1429

2250 2813 2500 2250 2045 1875 1730 1607

2500 3125 2777 2500 2272 2083 1923 1786

2750 3438 3055 2750 2500 2291 2115 1964

3000 3750 3333 3000 2727 2499 2307 2143

3250 4063 3610 3250 2954 2708 2499 2322

3500 4375 3888 3500 3181 2916 2692 2500

3750 4688 4166 3750 3408 3124 2884 2679

4000 5000 4444 4000 3636 3332 3076 2857

4250 5131 4721 4250 3863 3541 3268 3036

4500 5625 4999 4500 4090 3749 3460 3214

4750 5938 5277 4750 4317 3957 3653 3393

5000 6250 5554 5000 4544 4165 3845 3572

5250 6563 5832 5250 4772 4374 4037 3750

5500 6875 6110 5500 4999 4582 4229 3929

5750 7188 6387 5750 5226 4790 4421 4107

6000 7500 6665 6000 5453 4999 4614 4286

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

71




8 9 10 11 12 13 14

500 0429 0347 0287 0242 0207 0179 0157

725 0890 0720 0596 0502 0429 0372 0325

1000 1494 1209 1000 0842 0720 0624 0546

1250 2233 1806 1494 1259 1076 0932 0815

1500 3100 2508 2075 1748 1494 1294 1132

1725 4092 3310 2738 2307 1972 1708 1494

2000 5203 4209 3482 2933 2508 2171 1900

2250 6432 5203 4305 3626 3100 2684 2349

2500 7776 6290 5203 4383 3748 3245 2840

2750 9231 7467 6177 5203 4449 3852 3371

3000 10796 8733 7225 6086 5203 4505 3943

3250 12469 10087 8344 7029 6010 5203 4554

3500 14248 11526 9535 8032 6867 5946 5203

3750 16132 13050 10796 9094 7776 6732 5891

4000 18119 14658 12126 10214 8733 7562 6617

4250 20209 16348 13524 11392 9740 8433 7800

4500 22399 18119 14989 12626 10796 9347 8180

4750 24688 19972 16521 13917 11899 10303 9016

5000 27076 21903 18119 15263 13050 11299 9888

5250 29561 23914 19783 16664 14248 12336 10796

5500 32143 26003 21511 18119 15493 13414 11739

5750 34821 28169 23302 19629 16783 14531 12717

6000 37593 30411 25158 21192 18119 15688 13729

thesis - the measurement of chinese banks' intrinsic value in its developing securities market...

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