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China IPO

Ag Bank of China IPO: bull case, bear case

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Business week: Summary Box: China’s AgBank IPO nabs $19.2 billion.

Wiki; Official web site of Ag Bank China’s (ABC, 中国农业银行股份有限公司).


(source: ForeignHR)

Bear case
Ag bank of China primarily serves the less-developed regions and people in China: the rural areas, the villages, the farmers and peasants, the agriculture related business. Since the founding of People’s Republic (and Ag bank shortly after), farm produce price has been kept artificially low by the central government (in a way subsidize other industries), and since 1978 the reform of economy, the situation has improved, but the economy gap between rural and urban has increased in last 30 years.

Bull case