Core Viewpoint - China Construction Bank (CCB) reported strong performance in Q2 2025, with operating income and net profit showing significant growth, indicating a robust recovery trend [1][7]. Financial Performance - CCB achieved operating income of RMB 385.905 billion, a year-on-year increase of 10.36%, with growth accelerating by 15.76 percentage points compared to Q1 [1][3]. - The bank's net profit attributable to shareholders increased by 1.57% year-on-year, with a quarter-on-quarter growth of 5.56% [1][3]. - Interest income decreased by 1.05% year-on-year, but the decline was less severe than in Q1, indicating a marginal easing of net interest margin pressure [2][3]. - Non-interest income surged, with net fee and commission income rising by 18.53% year-on-year, reflecting strong growth in wealth management and advisory services [2][3]. Asset and Liability Management - As of June 30, 2025, CCB's total assets reached RMB 42.3 trillion, up 6.8% from the beginning of the year, while total liabilities grew by 6.5% to RMB 39.1 trillion [4][5]. - The bank effectively managed interest rate risks by optimizing its credit structure and reducing high-cost deposits, which is expected to stabilize net interest margins in the future [5][6]. Risk Management and Asset Quality - CCB's asset quality remains stable, with a projected non-performing loan ratio that is expected to hold steady and a leading provision coverage ratio in the industry [6][7]. - The bank has enhanced its risk management capabilities through digital transformation and targeted credit support in key areas [6][7]. Market Outlook - Analysts from Guohai Securities maintain a "buy" rating on CCB, citing its strong recovery signals and attractive valuation, with a target price of RMB 8.5, corresponding to 0.7 times price-to-book ratio for 2025 [7]. - The bank's stock price reflects a positive market sentiment, with A-shares trading at RMB 9.3 and H-shares at HKD 7.63, indicating a potential continuation of valuation recovery in the banking sector [7].