reports
- Kenny Yong Hui Lim
China Construction Bank (939 HK): 2023: Results in line; expect revenu...
CCB’s 2023 net profit came in largely within our expectation with 2.4% yoy growth. 4Q23 earnings inched up 0.3% yoy on better cost control and lower provisions despite the revenue dip. We expect the bank to face continued revenue headwinds in 2024 given the challenging environment. We cut our earnings forecasts on lower NIM assumptions and reduce our target price to HK$6.00. Maintain BUY.
- Jo Yee Ng
- Johnny Yum Chung Man
- Kate Luang
- Kenny Yong Hui Lim
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Stella Guo Yuting
Greater China Daily: Wednesday, April 3, 2024
KEY HIGHLIGHTS Strategy Small-Mid Cap Biweekly Eyeing re-rating for refrigerant suppliers as AC dealers front-load for peak sales in 2Q24. Results China Construction Bank (939 HK/BUY/HK$4.85/Target: HK$6.00) 2023: Results in line; expect revenue headwinds to persist in 2024. COSCO SHIPPING Holdings (1919 HK/BUY/HK$8.44/Target: HK$10.60) 2023: Results in line; expect an upbeat 1H24 performance. Maintain BUY. Kweichow Moutai (600519 CH/BUY/Rmb1,713.99/Target: Rmb2,488.00) 2023: Earnings up ...
- Jack Goh Tooan Orng
- Jo Yee Ng
- Johnny Yum
- Johnny Yum Chung Man
- Kate Luang
- Kenny Yong Hui Lim
- Kong Ho Meng
- Malaysia Research Team
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Singapore Research Team
- Stella Guo Yuting
- Stevanus Juanda
- Tanaporn Visaruthaphong
- Vincent Khoo Boo Aik
Regional Morning Meeting Notes: Wednesday, April 03, 2024
GREATER CHINA Strategy Small-Mid Cap Biweekly Eyeing re-rating for refrigerant suppliers as AC dealers front-load for peak sales in 2Q24. Results China Construction Bank (939 HK/BUY/HK$4.85/Target: HK$6.00) 2023: Results in line; expect revenue headwinds to persist in 2024. COSCO SHIPPING Holdings (1919 HK/BUY/HK$8.44/Target: HK$10.60) 2023: Results in line; expect an upbeat 1H24 performance. Maintain BUY. Kweichow Moutai (600519 CH/BUY/Rmb1,713.99/Target: Rmb2,488.00) 2023: Earnings up ...
- Kenny Yong Hui Lim
China Banking: It is the best of times, it is the worst of times.
The HSMBI has soared 8.5% ytd, riding on the tailwinds of valuation recovery and Central Huijin purchase. We opine that the subsequent valuation recovery needs to be further supported by fundamental improvements. However, the recent five-year LPR cut could continue to weigh on banks’ NIM and top-line growth. Banks’ asset quality remains stable, but the underlying vulnerabilities still persist. Maintain UNDERWEIGHT with CMB as our top pick.
- Kenny Yong Hui Lim
China Banking: H-shares: Laggard bargains or fairly priced?
The A-shares for China banks are outperforming their H-shares due to the widening yield gaps and buying momentum from the sovereign fund. However, our analysis suggests that the attractive valuation and dividend yield could improve H-shares performance in the near term. CMB is our top pick.
- Greater China Research Team
China Construction Bank (939 HK): 3Q23: Results in line; earnings up 2...
CCB’s 3Q23 earnings came in largely within our expectation with a 2.6% yoy growth, thanks to 24% lower provisions despite experiencing a negative revenue growth. CCB’s NIM compression eased slightly with a 7bp qoq decline as we saw the bank’s efforts in optimising its balance sheet structure. However, we have revised down our earnings estimates after delaying our expectations for a NIM turnaround to as early as 3Q24. Maintain BUY with a lower target price of HK6.00.
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Greater China Research Team
- Jo Yee Ng
- Johnny Yum Chung Man
- Kate Luang
- Ken Lee
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Terence Chiu
- Ziv Ang Sze Champ
Greater China Daily: Tuesday, October 31, 2023
KEY HIGHLIGHTS Strategy Small-Mid Cap Biweekly Pet food exports on track for recovery; beneficiary: Yantai China Pet Food. Results BYD Company (1211 HK/BUY/HK$246.20/Target: HK$630.00) 3Q23: Earnings up 82% yoy and 53% qoq, in line. Maintain BUY. Target price: HK$630.00. China Construction Bank (939 HK/BUY/HK$4.48/Target: HK$6.00) 3Q23: Results in line; earnings up 2.6% on lower credit costs. China Merchants Bank Co. (3968 HK/BUY/HK$30.30/Target: HK$45.00) 3Q23: Results miss; longer wait ne...
X2S SINOPHARM GROUP CO. LTD. CLASS H
002472 ZHEJIANG SHUANGHUAN DRIVELINE (A)
603288 FOSHAN HAITIAN FLAVOURING & FOOD CO. LTD. CLASS A
601689 NINGBO TUOPU GROUP CO. LTD. CLASS A
2899 ZIJIN MINING GROUP CO. LTD. CLASS H
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
§3§3 CHINA RESOURCES CEMENT
333 MIDEA GROUP
300760 SHENZHEN MINDRAY BIO-MEDICAL ELECTRONICS CO. LTD. CLASS A
002340 GEM CO LTD
06690 HAIER SMART HOME CO. LTD. CLASS H
- Greater China Research Team
China Banking: 3Q23 results preview: Earnings growth expected to reach...
We expect CCB’s and CMB’s earnings to grow 3.4% and 6.7% yoy due to lower impairment despite NIM dilution and subdued fee income. Although household loans remained sluggish in August, early signs of an economic recovery indicate that the current policy easing measures may be gaining traction, potentially stimulating effective credit demand. Maintain MARKET WEIGHT. CMB remains as our top pick given its attractive valuation and compelling 6.4% dividend yields.
- Greater China Research Team
China Banking: Not all bad for banks after several rate cuts.
In August, the PBOC lowered the 1-year LPR by 10bp to 3.45%, while surprisingly keeping the 5-year LPR at 4.20%. Additionally, the PBOC also allowed the repricing of existing mortgages to reduce mortgage borrowers’ financial burden. Against this backdrop, banks cut time deposit rates by a larger quantum to defend their NIM. All in all, the net impact of these rate cuts is minimal to banks’ NIM and earnings. Maintain MARKET WEIGHT. Top pick: China Merchants Bank.
- Greater China Research Team
China Construction Bank (939 HK): 1H23: Earnings continue to thrive de...
CCB’s 1H23 earnings are in line. Lower provisions and robust non-interest income growth helped to offset the weakening net interest income brought about by the NIM dilution. Most indicators showed that CCB’s asset quality remains largely stable despite rising macro headwinds. NIM compression has eased in 2Q23 and we expect it to bottom in the coming quarters. Maintain BUY with an unchanged target price of HK$6.30.
- Ariel Poh Yun Li
- Carol Dou Xiao Qin
- Greater China Research Team
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ming San Soong
- Stella Guo Yuting
- Sunny Chen
- Terence Chiu
- Ziv Ang Sze Champ
Greater China Daily: Friday, August 25, 2023
KEY HIGHLIGHTS Results AAC Technologies (2018 HK/HOLD/ HK$15.56/ Target: HK$14.50) 1H23: Margins deteriorated further; better visibility of recovery in 2H23. AIA Group (1299 HK/BUY/ HK$69.95/Target: HK$95.00) 1H23: VONB in line; margin slumps a concern. Aier Eye Hospital Group (300015 CH/BUY/Rmb18.02/Target: Rmb26.00) 1H23: Satisfactory results; strong demand to further boost revenue growth. China Construction Bank (939 HK/BUY/HK$4.11/Target: HK$6.30) 1H23: Earnings continue to thrive despit...
XGH ENN ENERGY HOLDINGS LIMITED
0939 CHINA CONSTRUCTION BANK CORPORATION CLASS H
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
01299 AIA GROUP LIMITED
300015 AIER EYE HOSPITAL GROUP CO. LTD. CLASS A
A2XN AAC TECHNOLOGIES HOLDINGS INC.
3690 MEITUAN DIANPING 3690 HK
2269 WUXI BIOLOGICS CAYMAN INC
9999 HK NETEASE INC
- Greater China Research Team
China Construction Bank (939 HK): 1H23 results preview: NIM dilution i...
CCB is scheduled to release its 1H23 earnings next month and we foresee the company achieving a 3.5% yoy growth in its net profit, underpinned by the recovery of noninterest income. Loans growth moderated in 2Q23 but NIM compression is expected to ease. Maintain BUY with a new target price of HK$6.30. The recent sell-down has increased the stock's attractiveness, considering its undemanding valuation (-1.5SD to historical P/B) and exceptionally high dividend yield of 9.6%.
- Celine Yuan Xinlin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Julia Pan Mengyao
- Ken Lee
- Ming San Soong
- Roy Chen Chengzhi
- Terence Chiu
- Tham Mun Hon
- Ziv Ang Sze Champ
Greater China Daily: Tuesday, July 18, 2023
KEY HIGHLIGHTS Economics Economic Activity 2Q23 growth disappoints, raising expectations for stimulus. Sector Aviation Airlines: Three major airlines still loss-making in 2Q23. Maintain UNDERWEIGHT with Air China (753HK/BUY/Target: HK$6.32) as our top pick. Commodities Weekly: China’s disappointing 2Q23 GDP growth weighs on base metals’ demand outlook; no signs of property market stabilisation. Property Latest comments by PBOC official Zou Lan point to further policy easing. Update China Co...
- Sabrina Soh
China Construction Bank (939 HK): 1Q23: Results in line; NIM to stabi...
CCB’s net profit grew 2.0% yoy, mainly dragged by the decline in interest income caused by multiple LPR cuts. Despite a significant exposure in the property segment, management guided that CCB’s exposure in the real estate industry is controllable and expects NIM to stabilise in the next few quarters. Maintain BUY with a target price of HK$6.06
- Ariel Poh Yun Li
- Carol Dou Xiao Qin
- Johnny Yum Chung Man
- Ken Lee
- Roy Chen Chengzhi
- Sabrina Soh
- Sunny Chen
- Terence Chiu
- Tham Mun Hon
- Ziv Ang Sze Champ
Greater China Daily: Tuesday, May 2, 2023
KEY HIGHLIGHTS Economics PMI Points to weak employment outlook. Sector Aviation Airlines: 1Q23 narrowing losses broadly in line with expectations. Maintain UNDERWEIGHT. Results Baoshan Iron & Steel (600019 CH/BUY/Rmb6.44/Target: Rmb7.10) 2022/1Q23: In line; speeding up M&A. China Construction Bank (939 HK/BUY/HK$5.25/Target: HK$6.06) 1Q23: Results in line; NIM to stabilise in next few quarters. China Merchants Bank (3968 HK/BUY/HK$37.65/Target: HK$58.00) 1Q23: Results in line; cautiously op...
600660 FUYAO GLASS INDUSTRY GROUP CO. LTD. CLASS A
600036 CHINA MERCHANTS BANK CO. LTD. CLASS A
601919 COSCO SHIPPING HOLDINGS CO. LTD. CLASS A
601939 CHINA CONSTRUCTION BANK CORPORATION CLASS A
X2S SINOPHARM GROUP CO. LTD. CLASS H
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
600019 BAOSHAN IRON & STEEL CO. LTD. CLASS A
2338 WEICHAI POWER CO. LTD. CLASS H
COSCO SHIPPING HOLDINGS CO. LTD. CLASS H
02238 GUANGZHOU AUTOMOBILE GROUP CO. LTD. CLASS H
300760 SHENZHEN MINDRAY BIO-MEDICAL ELECTRONICS CO. LTD. CLASS A
2747 ESTUN AUTOMATION
2460 GANFENG LITHIUM
338 WEICHAI POWER
1772 GANFENG LITHIUM CO. LTD. CLASS H
002340 GEM CO LTD
3606 FUYAO GLASS INDUSTRY GROUP CO LTD-H
603305 NINGBO XUSHENG AUTO TECHNOLOGY (A)
- Sabrina Soh
China Construction Bank (939 HK): 2022: Results in line; expect NIM co...
CCB’s attributable net profit grew 7.1% yoy, mainly due to a notable decline in noninterest income. Property risk remains manageable, as shown by the 0.04ppt decrease in the NPL ratio. While NIM compression continues to impact industry-wide earnings, increased demand for lending as China’s economy recovers should partially offset the negative deviation. Maintain BUY with target price reduced to HK$6.06.
- Carol Dou Xiao Qin
- Damon Shen
- Jessie Guo Yuting
- Jieqi Liu
- Jo Yee Ng
- Julia Pan Mengyao
- Ken Lee
- Sabrina Soh
- Sunny Chen
- Terence Chiu
- Zhifeng Shen
Greater China Daily: Friday, March 31, 2023
KEY HIGHLIGHTS Results China Construction Bank (939 HK/BUY/HK$5.07/Target: HK$6.06) 2022: Results in line; expect NIM compression to continue in 2023. China Mengniu Dairy (2319 HK/BUY/HK$32.60/Target: HK$39.30) 2022: Results below expectations; upbeat on future margin expansion. China Shineway Pharmaceutical (2877 HK/BUY/HK$7.26/Target: HK$10.50) 2022: Earnings growth beats expectations; TCM granule business continues to drive growth. Ganfeng Lithium (1772 HK/SELL/HK$49.45/Target: HK$35.00) ...
0939 CHINA CONSTRUCTION BANK CORPORATION CLASS H
EZQ CHINA MENGNIU DAIRY CO. LTD.
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
601939 CHINA CONSTRUCTION BANK CORPORATION CLASS A
02238 GUANGZHOU AUTOMOBILE GROUP CO. LTD. CLASS H
2877 CHINA SHINEWAY PHARMACEUTICA
2013 WEIMOB INC
2460 GANFENG LITHIUM
1772 GANFENG LITHIUM CO. LTD. CLASS H
9988 ALIBABA (9988 HK)
6049 POLY PROPERTY SERVICES CO LTD
- Sabrina Soh
China Banking: Limited impact of Credit Suisse crisis on Chinese Finan...
China's bank bond market investments do not have overseas AT1 holdings, limiting the potential contagion risk to the Chinese banking system. China’s AT1 bonds differ from overseas AT1 bonds mainly on their: a) write-down clauses with specific trigger conditions, while foreign AT1 bonds can have principal write-downs; b) dividend suspension mechanism; and c) higher probability of redemption. Maintain MARKET WEIGHT. Our top pick is CMB (3968 HK).
- Sabrina Soh
China Banking: Prefer retail-focused banks given China’s reopening
After China opened its border on 8 Jan 23, we expect the economy to rebound in 2023- 24. We prefer retail-focused banks given that the interest rates of personal credit loans are much higher than those of other loans, and credit card loans will not follow LPR adjustments. We also expect another 2-3 RRR cuts in 2023 to inject further liquidity into the real economy, which should also be positive for banks. Maintain MARKET WEIGHT. Our top pick is CMB (3968 HK).
- Sabrina Soh
China Construction Bank (939 HK): 3Q22: Results in line; steep decline...
CCB’s delivered in line 3Q22 results, with net profit improving 8.61% yoy, lifted by better-than-expected net interest income, despite NIM compression and a lacklustre non-interest income. While management expects that 4Q22’s NIM will sustain its downward momentum, we expect CCB to deliver solid earnings recovery in 4Q22 with its stable asset quality which offers attractive share price upside on its bargain valuations. Maintain BUY. Target price: HK$5.94.
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