Results Review
　　Maintain OU TPERFORM
　　3Q19 results in line with our forecast
　　1–3Q revenue rose 8.3% YoY to Rmb585bn and net profit attributableto shareholders rose 5.0% YoY to Rmb252bn. 3Q19 revenue rose6.7% YoY (vs. 9.1% in 1H19) and attributable net profit increased5.8% (vs. 4.7% in 1H19). Overall results are solid, in line withexpectations.
　　Trends to watch
　　3Q19 revenue growth slowed 2.4ppt compared with 1H19, in linewith expectations given lower asset yields amid easing monetarypolicies. We estimate average 3Q19 NIM fell 4bp QoQ to 2.23%.
　　3Q19 net fee income rose 4.8% YoY thanks to payment andsettlement, and agency sales of the insurance and credit cardbusiness. Balance sheet steadily expanded with total assets.
　　Stable 3Q19 asset quality with slower provision charges; profitgrowth stable. End-3Q19 NPL rate fell 4bp QoQ to 1.44%. Net NPLformation rate stayed flat YoY at 0.78%. Provision coverage ratio rose6.1ppt QoQ to 198.1%. 3Q19 provision charge increased 15.2% YoYvs. +18.8% in 1H19. ICBC maintained stable asset quality despite theweaker macro economy, implying excellent risk control.
　　1–3Q19 annualized ROAE fell 0.85ppt YoY to 14.30%. Core T1 CARrose 0.45ppt YoY to 12.93%, and CAR increased 1.84ppt to 16.65%.
　　ICBC issued Rmb80bn of perpetual bonds in July 2019, and Rmb70bnof preferred shares in September.
　　Financials and valuation
　　Given the narrowing NIM amid easing monetary policies, we cut our2019 attributable net profit forecast by 2.0% to Rmb312.3bn, andintroduce 2020 forecast of Rmb327.8bn. ICBC A-shares are trading at0.9x 2019e and 0.8x 2020e P/B, and H-share at 0.7x and 0.7x P/B.
　　Maintain OUTPERFORM for A/H. Given lower risk appetites, we trimour A-share TP by 1.6% to Rmb7.58 (1.1x 2019e and 1.0x 2020e P/Bwith 26.8% upside) and cut H-share TP by 6.2% to HK$8.11 (1.0x2019e and 1.0x 2020e P/B with 45.9% upside).
　　Risks
　　Macroeconomic fluctuations; disappointing asset quality.