China Construction Bank 0939

[winston]

not vested

China Construction Bank 中国建设银行 (939 HK)

China Construction Bank’s (CCB) net interest margin has improved on the back of better yields from corporate loans, up 2bp qoq in 1Q17 despite an increase of time deposits that raise the cost of capital.

CCB has conservatively classified loans that are more than 60 days overdue as nonperforming loans (NPLs).

It is more stringent than regulatory requirement of 90 days, allowing CCB to enjoy an extra buffer.

NPL formation has receded from Rmb150b in 2016 to Rmb25b in 1Q17.

Management plans to increase contributions from non-interest income, up 2ppt to 32.8% in 1Q17.

We set our target price of HK$7.36 based on 1.19x 2017F P/B and suggest a BUY rating.

http://en.ccb.com/en/home/indexv3.html

Source: UOBKH

[winston]

vested

<Research Report>Daiwa: CCB (00939.HK) 2017 Results May See Surprise; Reiterated Buy

CCB (00939.HK) will release its 2017 results after market close on 27 March.

Daiwa, in its report, expected the bank to report double-digit growth for net interest income for 4Q17 and 2018.

CCB's 2017 results may also come in a surprise.

The investment rating was reiterated at Buy with a target price of $10.5.

The stock was still the top pick for large state-owned banks.

Source: AAStocks Financial News

[winston]

not vested

CCB's Arm Owes Hundreds of Millions of USD Margin as Client Fails to Meet Margin Call: Report

Nickel prices at London Metal Exchange (LME) shot up 76% over the day to a 15-year high.

LME has given additional time to CCB (00939.HK)'s CCBI Global Markets to pay hundreds of millions of U.S. dollars of margin calls, reported Bloomberg.

An insider said CCBI Global Markets, as a broker, was not formally in default.

The incident could be due to a metals sector client's failure to make margin payment to CCBI Global Markets. As a result, CCBI Global Markets found it hard to pay for the unusually large margin calls.

Source: AAStocks Financial News

[winston]

not vested

China Construction Bank (939 HK / 601939 CH) - A defensive yield play

Summary (939 HK): Defensive and high dividend yield stocks, such as Chinese banks, are likely to continue to be preferred amid macro challenges.

H-share Chinese banks as a group is offering more than 2ppt higher dividend yield over the A-share counterparts.

Within Chinese banks, we prefer the Big-4 SOE banks, given a more stable DPS growth.

Year-to-date (YTD) total return (dividend and share price appreciation) of CCB has amounted to 16.6% since end of May (after the real estate policy combo was announced in late-April).

Within Chinese banks, we prefer the SOE banks, of which CCB is the top pick for its solid balance sheet and higher capability in sustaining higher than industry average earnings growth.

Despite revenue and net interest margin weaker-than-expected, earnings came in-line with expectations, thanks to lower credit costs.

Given stable asset quality, CCB remained conservative in provision release, maintaining its NPL coverage at a relatively high level of 245% in 2Q24, which we believe should help offer better earnings visibility among its peers going forward.

CCB is trading at 0.4x forward price-to-book (P/B) which is close to -1 s.d. to historical average.

The stock is offering a relatively high dividend yield of 8.1% and 8.3% in 2024 and 2025 respectively and is likely to attract fund inflows.

We finetune our fair value estimate to HKD 7.10 with an unchanged valuation multiple of 0.5x forward P/B, which is at -0.25 s.d. to historical average and implying 6.3% 2025 dividend yield.

Source: OCBC

[winston]

Benefiting from policy measures

A series of policy measures have eased investors’ excessive concerns about macroeconomic uncertainties and property-related exposures, in our view.

We see this reducing downside risks relating to asset quality, which we believe could be positive for bank valuations.

We cut our FY24-26F EPS by 1.8-6.8%, primarily to factor in lower forecasts for non-interest income in FY24F and PPOP growth over FY25-26F.

Reiterate Add rating with a higher TP of HK$11.10, driven by reduced concerns over policy risks, partly offset by lower sustainable ROE.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 0660C6081C

[winston]

not vested

China Construction Bank (939 HK)

1Q25: Earnings Miss Due To Weaker NIM And Fee Income; Tariff Risk Is Limited

CCB delivered disappointing 1Q25 results as net profit declined 4.0%, dragged by NIM compression and tepid fee income.

Furthermore, revenue growth was no longer supported by trading gains, as yields rebounded during 1Q25.

Asset quality was a silver lining as CCB highlighted the sequential improvement in the retail and property developer segments.

Management also noted that tariff risk is manageable in terms of both fee income and asset quality.

Downgrade to HOLD. Target price: HK$7.00.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

China Construction Bank ADD, TP HK$11.40, HK$7.29 close

We see China Construction Bank’s (CCB) FY25F P/E of 5.1x (the lowest among the big four banks, i.e. ICBC, CCB, BOC and ABC), its FY25F dividend yield of 5.9% and its large H-share free float as attractive to Southbound investors.

Source: CGS