2025-10-23 13:28Summary of China Construction Bank Corp. Research Call Company Overview - Company: China Construction Bank Corp. (CCB) - Ticker: 0939.HK - Market Cap: Rmb1,798,235 million - Current Share Price: HK$7.75 (as of October 20, 2025) - Price Target: HK$9.50 - Dividend Yield: 5.8% [5][2] Industry Insights - Industry: China Financials - Industry View: Attractive [5] - Expected Trends: - Seasonal fund inflows are anticipated to support bank share prices, with more upside expected towards the end of 2025 [2] - Moderate but steady credit demand is expected to stabilize financial asset yields and bank net interest margin (NIM), supporting revenue and profit growth in upcoming quarters [2] Financial Performance Expectations - 3Q25 Outlook: Positive profit growth is expected for CCB, driven by a rebound in fee income and a narrowing of NIM contraction [2] - Profit Growth Probability: Estimated probability of 70% to 80% for positive profit growth scenario [3] Valuation Methodology - Valuation Model: 3-stage dividend discount model - Discount Rate: 10.0% in the base case - Second-stage ROE: 8.7% - Long-term ROE: 8.1% - Long-term Dividend Payout Ratio: 32% [8] Risks and Considerations - Upside Risks: - Reduction in policy intervention amid a rapid rebound in business fundamentals - Higher-than-expected non-interest income from a stronger equity market [11] - Downside Risks: - Further slowdown in China's macro economy - Accelerated deposit rate deregulation - Increased credit risk from SME loans as CCB shifts loan allocation to inclusive finance - Large social responsibility as a state-owned bank [11] Key Financial Metrics - Average Daily Trading Value: HK$2,323 million - 52-Week Price Range: HK$8.56 - HK$5.80 [5] Analyst Ratings - Stock Rating: Overweight [5] - Analysts Involved: Richard Xu, CFA; Chiyao Huang [4] Conclusion - CCB is positioned for potential growth in the near term, supported by favorable market conditions and a solid dividend yield. However, investors should remain cautious of macroeconomic risks and the bank's evolving credit risk profile.