reports
- Kenny Yong Hui Lim
China Construction Bank (939 HK): 1Q25: Earnings miss due to weaker NI...
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.
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Claire Wang Kelai
- Colin Lee
- Ejann Hiew
- Greater China Research Team
- Johnny Yum Chung Man
- Ken Lee
- Kenny Yong Hui Lim
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Ziv Ang Sze Champ
Greater China Daily: Wednesday, April 30, 2025
KEY HIGHLIGHTS Results China Construction Bank (939 HK/HOLD/HK$6.79/Target: HK$7.00) 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...
600132 CHONGQING BREWERY CO.LTD CLASS A
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
6WX CHINA LONGYUAN POWER GROUP CORP. LTD. CLASS H
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
300124 SHENZHEN INOVANCE TECHNOLOGY CO. LTD CLASS A
002472 ZHEJIANG SHUANGHUAN DRIVELINE (A)
000333 MIDEA GROUP CO. LTD. CLASS A
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
300760 SHENZHEN MINDRAY BIO-MEDICAL ELECTRONICS CO. LTD. CLASS A
2747 ESTUN AUTOMATION
1199 COSCO SHIPPING PORTS LIMITED
600699 WUXI APPTEC CO. LTD. CLASS H
NINGBO JOYSON ELECTRONIC CORP
- Kenny Yong Hui Lim
China Banking: Playing safe amid tariff fears. Upgrade to OVERWEIGHT.
Trump’s unprecedented reciprocal tariffs triggered a massive sell-off in the Hong Kong market. On 30 Mar 25, China’s four SOE banks also announced their capital-raising plans, with the dilution impact largely in line with our expectations. We believe the potential risks from Trump's tariffs are manageable for Chinese banks. Hence, investors may shift back to defensive, high dividend yield names like Chinese banks amid the sentiment hit from the tariff shocks. Upgrade to OVERWEIGHT. Top pick: CCB...
- Benyamin Mikael
- Gigi Cheuk
- Heidi Mo Jinghui
- Jack Goh Tooan Orng
- John Cheong Ming Chern
- Kate Luang
- Kenny Yong Hui Lim
- Lester Siew
- Thanawat Thangchadakorn
Regional Morning Meeting Notes: Thursday, April 10, 2025
GREATER CHINA Sector Banking Playing safe amid tariff fears. Small/Mid Cap Highlights JBM Healthcare (2161 HK/BUY/HK$1.75/Target: HK$2.42) FY26: New rounds of marketing campaigns to fuel growth. INDONESIA Results Merdeka Copper Gold (MDKA IJ/BUY/Rp1,040/Target: Rp1,900) FY24: Below our and street’s expectations MALAYSIA Sector Gloves ...
KTC KRUNGTHAI CARD PCL
0939 CHINA CONSTRUCTION BANK CORPORATION CLASS H
5168 HARTALEGA HOLDINGS BHD.
7113 TOP GLOVE CORPORATION BHD.
7153 KOSSAN RUBBER INDUSTRIES BHD.
002161 INVENGO INFORMATION TECHNOLOGY (A)
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
SAWAD SRISAWAD CORPORATION PUBLIC COMPANY LTD
MTC MUANGTHAI CAPITAL PCL
KLK KUALA LUMPUR KEPONG BHD
PROP PROPNEX LTD
CSSC CHINA SUNSINE CHEMICAL HOLDINGS LTD
TIDLOR NGERN TID LOR PCL
MDKA MERDEKA COPPER GOLD TBK PT
OTEK OILTEK INTERNATIONAL (OTEK SP)
- Kenny Yong Hui Lim
China Construction Bank (939 HK): 2024: Above expectations on better N...
CCB’s 2024 earnings (+0.9% yoy) were above our expectation, mainly driven by its resilient NIM on better deposit cost management, strong trading gains and lower impairment. Asset quality remains solid but pressure on the retail segment is increasing. MoF will inject Rmb105b of new capital into CCB which will result in a 4.3% equity dilution and 50bp boost in CET1 ratio. We expect a largely neutral market reaction due to a smaller dilution size. Maintain BUY. Target price: HK$7.50.
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Claire Wang Kelai
- Colin Lee
- Ejann Hiew
- Greater China Research Team
- Johnny Yum Chung Man
- Ken Lee
- Kenny Yong Hui Lim
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Ziv Ang Sze Champ
Greater China Daily: Monday, March 31, 2025
KEY HIGHLIGHTS Results China Construction Bank (939 HK/BUY/HK$6.70/Target: HK$7.50) CCB’s 2024 earnings (+0.9% yoy) were above our expectation, mainly driven by its resilient NIM on better deposit cost management, strong trading gains and lower impairment. Asset quality remains solid but pressure on the retail segment is increasing. MoF will inject Rmb105b of new capital into CCB which will result in a 4.3% equity dilution and 50bp boost in CET1 ratio. We expect a largely neutral market reacti...
00992 LENOVO GROUP LIMITED
LGX1 CHINA RESOURCES GAS GROUP LIMITED
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
02331 LI NING COMPANY LIMITED
RLF LONGFOR GROUP HOLDINGS LTD.
000333 MIDEA GROUP CO. LTD. CLASS A
0168 TSINGTAO BREWERY CO. LTD. CLASS H
2333 GREAT WALL MOTOR CO. LTD. CLASS H
02238 GUANGZHOU AUTOMOBILE GROUP CO. LTD. CLASS H
2877 CHINA SHINEWAY PHARMACEUTICA
1093 CSPC PHARMACEUTICAL GROUP LTD
06690 HAIER SMART HOME CO. LTD. CLASS H
600699 NINGBO JOYSON ELECTRONIC CORP
- Bella Lu Yifei
- Benjaphol Suthwanish
- Carol Dou Xiao Qin
- Colin Lee
- Ejann Hiew
- Johnny Yum Chung Man
- Ken Lee
- Kenny Yong Hui Lim
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Tanaporn Visaruthaphong
Regional Morning Notes - Monday, March 31, 2025
GREATER CHINA Results China Construction Bank (939 HK/BUY/HK$6.70/Target: HK$7.50): 2024: Above expectations on better NIM; recapitalisation plan is finalised. China Shineway Pharmaceutical (2877 HK/HOLD/HK$8.05/Target: HK$8.50): 2024: Bottom line misses; targets revenue growth of 10% yoy in 2025. Great Wall Motor (2333 HK/BUY/HK$14.20/Target: HK$23.00): 4Q24: Earnings in line with estimates. Maintain BUY. Target price: HK$23.00. Haier Smart Home (6690 HK/BUY/HK$24.70/Target: HK$37.80): 2024: 4Q...
00992 LENOVO GROUP LIMITED
02331 LI NING COMPANY LIMITED
PTTGC PTT GLOBAL CHEMICAL PUBLIC COMPANY LTD
000333 MIDEA GROUP CO. LTD. CLASS A
2333 GREAT WALL MOTOR CO. LTD. CLASS H
2877 CHINA SHINEWAY PHARMACEUTICA
06690 HAIER SMART HOME CO. LTD. CLASS H
600699 JOYSON ELECTRONICS CORP
- Damon Shen
- Jieqi Liu
China Banking: Improved 4Q24 outlook amid policy supports.
China banks reported improved earnings growth, driven by narrower revenue declines, strong trading gains and lower credit costs. We expect the sequential NIM decline to worsen in 4Q24 due to policy rate cuts. However, we believe China banks will maintain positive earnings growth for 2024, supported by the low base effect in 4Q23 and the stimulus package announced in late-Sep 24. Maintain MARKET WEIGHT. Top pick: CMB.
- Kenny Yong Hui Lim
China Construction Bank (939 HK): 3Q24: Earnings growth returns to pos...
CCB’s 3Q24 results beat our expectations with a turnaround in profit growth, thanks to lower provisions and a 4.4x increase in other NII. Revenue dropped 2.7% yoy due to NIM compression and tepid fee income. CCB highlighted that the existing headwinds will weigh on its NIM in 2025 but the recent rate cuts will be neutral to its NIM movement in the long run. We believe the restored earnings growth could ease investor concerns about the sustainability of CCB’s high dividend yield. Maintain BUY. Ta...
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Colin Lee
- Greater China Research Team
- Johnny Yum Chung Man
- Ken Lee
- Kenny Yong Hui Lim
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Ziv Ang Sze Champ
Greater China Daily: Thursday, October 31, 2024
KEY HIGHLIGHTS Results ASMPT (522 HK/BUY/HK$87.00/Target: HK$104.50) ASMPT’s Semi solution business registered better-than-expected revenue and margins in 3Q24 thanks to robust advanced packaging demand, which led to a 10% beat vs our operating profit estimates, although reported net profit ended up below expectations due to forex loss. ASMPT will remain a key beneficiary of the AI investment trend, and we recommend accumulating after its recent share price correction. Maintain BUY. Target p...
ASM PACIFIC TECHNOLOGY LIMITED
000858 WULIANGYE YIBIN CO. LTD. CLASS A
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
601888 CHINA TOURISM GROUP DUTY FREE CORPORATION LIMITED CLASS A
002472 ZHEJIANG SHUANGHUAN DRIVELINE (A)
601012 LONGI GREEN ENERGY TECHNOLOGY CO LTD CLASS A
000333 MIDEA GROUP CO. LTD. CLASS A
600019 BAOSHAN IRON & STEEL CO. LTD. CLASS A
1211 BYD COMPANY LIMITED CLASS H
01801 INNOVENT BIOLOGICS INC.
300760 SHENZHEN MINDRAY BIO-MEDICAL ELECTRONICS CO. LTD. CLASS A
1199 COSCO SHIPPING PORTS LIMITED
601138 FOXCONN INDUSTRIAL INTERNET CO. LTD. CLASS A
603305 NINGBO XUSHENG AUTO TECHNOLOGY (A)
- Bella Lu Yifei
- Benjaphol Suthwanish
- Colin Lee
- Johnny Yum Chung Man
- Ken Lee
- Kenny Yong Hui Lim
- Shirley Wang Xueyi
- Stella Guo Yuting
- Stevanus Juanda
Regional Morning Notes - Thursday, October 31, 2024
GREATER CHINA Results ASMPT (522 HK/BUY/HK$87.00/Target: HK$104.50): 3Q24: Reported earnings miss expectations on forex loss but core business recovery picking up; maintain BUY. BYD Company (1211 HK/HOLD/HK$295.00/Target: HK$260.00): 3Q24: Earnings up 12% yoy, in line with estimates. Maintain HOLD. China Construction Bank (939 HK/BUY/HK$5.97/Target: HK$6.70): 3Q24: Earnings growth returns to positive territory on lower credit cost. Foxconn Industrial Internet (601138 CH/BUY/Rmb24.84/Target: Rmb...
ASM PACIFIC TECHNOLOGY LIMITED
000858 WULIANGYE YIBIN CO. LTD. CLASS A
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
SCC SIAM CEMENT PUBLIC CO. LTD.
002472 ZHEJIANG SHUANGHUAN DRIVELINE (A)
1211 BYD COMPANY LIMITED CLASS H
601138 FOXCONN INDUSTRIAL INTERNET CO. LTD. CLASS A
CMRY PT CISARUA MOUNTAIN DAIRY TBK
- Kenny Yong Hui Lim
- Tham Mun Hon
China Strategy: Providing greater countercyclical support.
On 12 Oct 24, the MOF updated its countercyclical supportive policies and structural reforms to achieve high quality growth. The key positives are initiatives to resolve local government debt and substantially increase the debt limit. Finer details of the policies are lacking due to pending approval by the Standing Committee of the NPC. Overall, these are positive but we downgrade the banking sector to MARKET WEIGHT due to the potential EPS and ROE dilution on SOE banks from the capital injectio...
0939 CHINA CONSTRUCTION BANK CORPORATION CLASS H
1398 INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED CLASS H
01288 AGRICULTURAL BANK OF CHINA LIMITED CLASS H
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
01658 POSTAL SAVINGS BANK OF CHINA CO. LTD. CLASS H
3988 BANK OF CHINA LTD
- Kenny Yong Hui Lim
China Banking: 1H24 results wrap-up: Walking a tightrope.
China banks reported a smaller earnings decline in 2Q24 on lower impairment charges and strong trading income. We estimate that the 80bp mortgage repricing could hit banks’ earnings by 6.5bp and 9.2% in 2025. The fundamental weakness due to macro headwinds and mortgage repricing news could weigh on share prices. Nonetheless, the depressed valuations and resurging dividend yields after the recent correction could be a silver lining again for defensive plays. Maintain OVERWEIGHT. Top pick: CMB.
- Kenny Yong Hui Lim
China Construction Bank (939 HK): 2Q24: Earnings decline narrowed to 1...
CCB’s 2Q24 earnings (-1.4% yoy) were slightly below our expectation. PPOP decreased 4.7% yoy due to larger NIM dilution and fee income decline, partly offset by strong trading income. Despite that, management guided that the deposit rate cut in July could fully offset the impact of LPR cuts, and NIM downward pressure will continue to ease in 2H24. Asset quality remains decent with flattish NPL ratio but pressure on the retail segment is increasing. Maintain BUY. Target price: HK$6.00.
- Carol Dou Xiao Qin
- Greater China Research Team
- Kenny Yong Hui Lim
- Ringo Tang Chi Yu
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Ziv Ang Sze Champ
Greater China Daily: Tuesday, September 3, 2024
KEY HIGHLIGHTS Results China Construction Bank (939 HK/BUY/HK$5.43/Target: HK$6.00) CCB’s 2Q24 earnings (-1.4% yoy) were slightly below our expectation. PPOP decreased 4.7% yoy due to larger NIM dilution and fee income decline, partly offset by strong trading income. Despite that, management guided that the deposit rate cut in July could fully offset the impact of LPR cuts, and NIM downward pressure will continue to ease in 2H24. Asset quality remains decent with flattish NPL ratio but press...
- Arsit Pamaranont
- Carol Dou Xiao Qin
- Johnny Yum
- Kenny Yong Hui Lim
- Kitpon Praipaisarnkit
- Krit Tanarattananon
- Malaysia Research Team
- Ringo Tang Chi Yu
- Shirley Wang Xueyi
- Singapore Research Team
- Stella Guo Yuting
- Sunny Chen
- Thailand Research Team
- Vincent Khoo Boo Aik
- Ziv Ang Sze Champ
Regional Morning Notes - Tuesday, September 03, 2024
GREATER CHINA Results China Construction Bank (939 HK/BUY/HK$5.43/Target: HK$6.00): 2Q24: Earnings decline narrowed to 1.4% on strong trading income. China Merchants Bank. (3968 HK/BUY/HK$32.35/Target: HK$42.00): 1H24: Still waiting to thrive. China Tourism Group Duty Free (601888 CH/BUY/Rmb58.93/Target: Rmb83.40): 2Q24: Slight earnings miss; Hainan duty-free business under pressure; airport business recovery underway. Kingmed Diagnostics (603882 CH/BUY/Rmb25.66/Target: Rmb35.00): 1H24: Signific...
- Kenny Yong Hui Lim
China Banking: 2Q24 results preview: Shifting away from volume to pric...
The PBOC reiterated it will reduce its focus on quantitative targets and elevate the importance of interest rates in its quarterly report. According to NAFR, Chinese banks delivered a muted earnings growth in 2Q24 due to a slowdown in balance sheet growth, but NIM and asset quality pressures are easing. Upside surprise could come from noninterest income due to a bullish bond market. Maintain OVERWEIGHT. Top pick: CMB.
- Kenny Yong Hui Lim
China Banking: Implications of PBOC’s bond sales for China banks.
The PBOC plans to sell CGBs to cool the overheated bond market, and we estimate the central bank may borrow up to Rmb3.8t of CGBs for this move. While this could lead to unrealised losses on banks' FVTPL bond positions, it might also prompt banks to realise gains on FVTPL and FVTOCI bond investments which will drive their trading income. Additionally, a stabilised bond yield environment could support banks’ asset yield and NIM performance. Maintain OVERWEIGHT. Top pick: CMB.
- Kenny Yong Hui Lim
China Banking: Implications of property rescue package and dividend ta...
The impact of the recent property rescue package is mixed. Asset quality concern is expected to ease but the lower mortgage rate could continue to weigh on banks’ NIM. Thus, further policy supports from the PBOC, such as RRR and deposit rate cuts, are much needed. Meanwhile, the potential removal of dividend tax for Southbound investors could boost the sector’s valuation further given the attractive A/H spreads and high dividend yields. Upgrade to MARKET WEIGHT. Top pick: CMB.
- Kenny Yong Hui Lim
China Construction Bank (939 HK): 1Q24: Results in line with better NI...
CCB reported in-line results with a 2.2% yoy net profit decline. PPOP reduced by 3.4% yoy due to muted fee income and higher CIR. NIM narrowed by 2bp qoq to 1.57%, dragged by declining loan yields but offset by better liability management which resulted in a 7bp lower deposit funding cost. NPL ratio improved on a higher write-off but the gross NPL formation ratio edged up. Tier-1 capital ratio was boosted 96bp qoq to 14.11% under the New Capital Rule. Maintain BUY. Target price: HK$6.00.
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