Analysts predict a measly 10-20% chance that CITIC's new strategies will work out

Not a very good news indeed.

According to Bernstein Research, CITIC's multiple has continuously lagged all of its peers which reflects the weakest profitability the bank has reported, its lack of capital discipline and negative prospects for the banks' future earnings potential as it is poorly positioned for China's transition into a more consumption-driven and private sector-led economy.

Only by improving its retail banking franchise and developing specialized high profitable businesses will the bank be able to deliver healthier profitability thus an upward re-rating on its valuation.

Here's more from Bernstein Research:

However, we believe there is only 10-20% chance that the new strategies the new management has been trying to carry out to address these above-mentioned weaknesses will be successfully executed.

Regulatory hurdles (China's banking operating environment is one the most heavily-regulated), lack of differentiation and being a slow-mover will render these strategies ineffective and even unenforceable.

At 0.76x 2012A book value, CITIC trades at a 30%+ discount to the other major Chinese banks. Despite the attractive valuation, we do not foresee any major fundamental improvement in the bank's operating performance that could drive a meaningful upward re-rating of the stock.

As a result, we continue to rate CITIC Market-Perform with a HK$4.10 share price target. This implies 0% upside from the current share price.