China Construction Bank (H)

  • Ticker0939
  • ISINCNE1000002H1
  • ExchangeHong Kong Stock Exchange
  • SectorBanks
  • CountryChina

Analysts

UOB
Eric Wang Zhen ...
  • Jayson Kong

Banking - A deeper look into banks’ asset quality: Collateral is key

More than 56% of SOEs’ loans are backed by collateral which can protect them from a loss in principle repayment when default occurs. Besides that, SOEs also have a superior corporate/retail loan mix (more mortgages and less corporate loans) which offers better protection to asset quality against the COVID-19 impact. Maintain UNDERWEIGHT on the sector; top pick is China Merchants Bank (3968 HK).

UOB
Eric Wang Zhen ...
  • Jayson Kong

Banking - PBOC puts Chinese banks on the spot again

Already wrestling a growth slowdown in 2019, we expect the Covid-19 epidemic to pile further pressure on China’s soft macro environment and weigh on banks’ asset quality. Meanwhile, the PBOC’s call for banks to support the real economy may potentially come at the expense of sector earnings. We believe poor fundamentals of unlisted small banks represent the weakest link in the banking system, and rising default risk has not been fully discounted by the market. Maintain UNDERWEIGHT; top BUY is CMB (3968 HK).

UOB
Cherrie Tan Yue ...
  • Eric Wang Zhen
  • Jayson Kong
  • Tham Mun Hon

Banking - PBOC puts Chinese banks on the spot again

Already wrestling a growth slowdown in 2019, we expect the Covid-19 epidemic to pile further pressure on China’s soft macro environment and weigh on banks’ asset quality. Meanwhile, the PBOC’s call for banks to support the real economy may potentially come at the expense of sector earnings. We believe poor fundamentals of unlisted small banks represent the weakest link in the banking system, and rising default risk has not been fully discounted by the market. Maintain UNDERWEIGHT; top BUY is CMB (3968 HK).

UOB
Cherrie Tan Yue ...
  • Eric Wang Zhen
  • Jayson Kong
  • Tham Mun Hon

China Banking: PBOC puts Chinese banks on the spot again. UNDERWEIGHT

Already wrestling a growth slowdown in 2019, we expect the Covid-19 epidemic to pile further pressure on China’s soft macro environment and weigh on banks’ asset quality. Meanwhile, the PBOC’s call for banks to support the real economy may potentially come at the expense of sector earnings. We believe poor fundamentals of unlisted small banks represent the weakest link in the banking system, and rising default risk has not been fully discounted by the market. Maintain UNDERWEIGHT; top BUY is CMB (3968 HK).

UOB
Eric Wang Zhen ...
  • Jayson Kong

Banking - Small banks’ solvency and liquidity are still major concerns

NPL levels remain our main concern. As the economy remains weak, banks are facing pressure in asset quality, especially small banks which have low provisions. We found that the rate spread between the NCD issued by SOEs and by small banks is expanding. Maintain UNDERWEIGHT on the sector; top pick is Bank of Ningbo (SELL).

UOB
Eric Wang Zhen ...
  • Jayson Kong

Banking - A deeper look into banks’ asset quality: Collateral is key

More than 56% of SOEs’ loans are backed by collateral which can protect them from a loss in principle repayment when default occurs. Besides that, SOEs also have a superior corporate/retail loan mix (more mortgages and less corporate loans) which offers better protection to asset quality against the COVID-19 impact. Maintain UNDERWEIGHT on the sector; top pick is China Merchants Bank (3968 HK).

UOB
Eric Wang Zhen ...
  • Jayson Kong

Banking - PBOC puts Chinese banks on the spot again

Already wrestling a growth slowdown in 2019, we expect the Covid-19 epidemic to pile further pressure on China’s soft macro environment and weigh on banks’ asset quality. Meanwhile, the PBOC’s call for banks to support the real economy may potentially come at the expense of sector earnings. We believe poor fundamentals of unlisted small banks represent the weakest link in the banking system, and rising default risk has not been fully discounted by the market. Maintain UNDERWEIGHT; top BUY is CMB (3968 HK).

UOB
Cherrie Tan Yue ...
  • Eric Wang Zhen
  • Jayson Kong
  • Tham Mun Hon

Banking - PBOC puts Chinese banks on the spot again

Already wrestling a growth slowdown in 2019, we expect the Covid-19 epidemic to pile further pressure on China’s soft macro environment and weigh on banks’ asset quality. Meanwhile, the PBOC’s call for banks to support the real economy may potentially come at the expense of sector earnings. We believe poor fundamentals of unlisted small banks represent the weakest link in the banking system, and rising default risk has not been fully discounted by the market. Maintain UNDERWEIGHT; top BUY is CMB (3968 HK).

UOB
Cherrie Tan Yue ...
  • Eric Wang Zhen
  • Jayson Kong
  • Tham Mun Hon

China Banking: PBOC puts Chinese banks on the spot again. UNDERWEIGHT

Already wrestling a growth slowdown in 2019, we expect the Covid-19 epidemic to pile further pressure on China’s soft macro environment and weigh on banks’ asset quality. Meanwhile, the PBOC’s call for banks to support the real economy may potentially come at the expense of sector earnings. We believe poor fundamentals of unlisted small banks represent the weakest link in the banking system, and rising default risk has not been fully discounted by the market. Maintain UNDERWEIGHT; top BUY is CMB (3968 HK).

UOB
Eric Wang Zhen ...
  • Jayson Kong

Banking - Small banks’ solvency and liquidity are still major concerns

NPL levels remain our main concern. As the economy remains weak, banks are facing pressure in asset quality, especially small banks which have low provisions. We found that the rate spread between the NCD issued by SOEs and by small banks is expanding. Maintain UNDERWEIGHT on the sector; top pick is Bank of Ningbo (SELL).

UOB
Carol Dou Xiao Qin ...
  • Charles Wong Kok Min
  • Eric Wang Zhen
  • Jayson Kong
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • K Ajith
  • Katrina Chen Chucan
  • Lee Yuk Kei
  • Michael Cheung Ho Bun
  • Neo Chen Wentao
  • Nick Liu Sunliang
  • Sandra Huang Jieqiong
  • Shaun Tan
  • Tham Mun Hon
  • Zhifeng Shen

Greater China Daily: Thursday, August 29, 2019

KEY HIGHLIGHTS Economics The Big Picture Financing squeeze may prove to be the Achilles heel of FAI growth. Results China Construction Bank (939 HK/BUY/HK$5.80/Target: HK$7.23) 1H19: Results in line; NIM squeezed as expected, but asset quality improved. China Jinmao Holdings (817 HK/BUY/HK$4.75/Target: HK$5.30) 1H19: Top-line disappoints but core profit in line; stable gross margins. China Molybdenum (3993 HK/HOLD/HK$2.09/Target: HK$2.30) 1H19: Results below expectation; production of major products and ASPs dropped. China Southern Airlines (1055 HK/BUY/HK$4.41/Target: HK$5.40) 1H19: R...

UOB
Jayson Kong ...
  • Joyce Chan Pui Lai
  • K Ajith
  • Neo Chen Wentao
  • Nick Liu Sunliang
  • Sandra Huang Jieqiong
  • Tham Mun Hon

Greater China Daily: Tuesday, June, 11, 2019

KEY HIGHLIGHTS CHINA Economics Trade Better-than-expected exports unlikely to be sustainable. Sector Property Weekly: Developers with strong sales. Update China Resources Cement Holdings (1313 HK/BUY/HK$7.20/Target: HK$9.27) Infrastructure demand observed; margins to sustain in 2H19. HONG KONG Update BOC Aviation (2588 HK/HOLD/HK$65.85/Target: HK$69.00) Slowing pax traffic, weak Libor and uncertainty over B737 Max recertification could curtail outperformance in 2H19; downgrade to HOLD. TRADERS’ CORNER CCB (939 HK): Trading Buy Range Beijing Enterprises Water (371 HK): Trading B...

UOB
Eric Wang Zhen ...
  • Johnny Yum Chung Man
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • K Ajith
  • Ken Lee
  • Lee Yuk Kei
  • Robin Yuen

Greater China Daily: Thursday, May, 2, 2019

KEY HIGHLIGHTS CHINA Sector Aviation Flat pax yields in 1Q19; earnings could improve in 2H19 with a cut in civil aviation development fee. Results China Construction Bank (939 HK/BUY/HK$6.93/Target: HK$9.00) 1Q19: Margins squeezed but non-interest income boosted. China Merchants Bank (3968 HK/BUY/HK$38.85/Target: HK$45.59) 1Q19: Steady growth supported by strong balance sheet. Guangzhou Automobile Group (2238 HK/BUY/HK$8.43/Target: HK$12.00) 1Q19: Core net profit falls 42% yoy but surges 279% qoq, slightly missing estimates. Industrial and Commercial Bank of China (1398 HK/BUY/HK$5.89...

UOB
Johnny Yum Chung Man ...
  • Joyce Chan Pui Lai
  • Ken Lee
  • Robin Yuen
  • Zhifeng Shen

Greater China Daily: Wednesday, April, 17, 2019

KEY HIGHLIGHTS CHINA Shariah Gems Conference Highlights China Gas (384 HK/BUY/HK$25.55/Target: HK$35.44) Key takeaways from Malaysia Shariah Gems Conference: Organic expansion in FY19 gas sales. China Lilang (1234 HK/NOT RATED/HK$8.81) Smart casual and e-commerce driving growth Geely Auto (175 HK/BUY/HK$16.68/Target: HK$20.00) Takeaways from Malaysia Shariah Gems Conference: Updates on sales, margins, competition, partnerships and strategies. TRADERS’ CORNER CCB (939 HK): Trading Buy Range China Education (839 HK): Trading Buy Range

CHINA CON.BK.CORPORATION sees an upgrade to Slightly Positive due to a better fundamental star rating

The general evaluation of CHINA CON.BK.CORPORATION (HK), a company active in the Money Center Banks industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date October 18, 2019, the closing price was HKD 6.26 and its potential was estimated at HKD 6.60.

Salikin Siti

China Construction Bank Corporation

Rudziah Siti

China Construction Bank

Rudziah Siti

China Construction Bank

Rudziah Siti

China Construction Bank

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