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China Construction Bank Corp Class H 00939

Morningstar Rating
HKD 4.86 +0.08 (1.67%)
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Company Report

China SOE Banks Earnings: No Surprises; Continued Headwinds Reflected, Our FVEs Are Unchanged

We maintain fair value estimates on the H-shares of Industrial and Commercial Bank of China, or ICBC, at HKD 5, China Construction Bank, or CCB, at HKD 6.2, Agricultural Bank of China, or ABC, at HKD 3.5 per, Bank of China, or BOC, at HKD 3.5, and Bank of Communications, or BoCom, at HKD 6 as results were largely in line and we leave our key assumptions unchanged. H-share prices are undemanding for all SOE banks, but our preferred picks are CCB, ICBC, and CMB on their strong capital position, above-peer return on risk weighted assets, and steady dividends.

Price vs Fair Value

00939 is trading within a range we consider fairly valued.
Price
HKD 4.86
Fair Value
HKD 4.20
Uncertainty
Medium
1-Star Price
HKD 1.56
5-Star Price
HKD 3.88
Economic Moat
Rqxds
Capital Allocation
Mfltjhk

Bulls Say, Bears Say

Bulls

CCB's banking app is one of the most popular financial ones in China, with monthly active users increasing 105 million in second-quarter 2023.

Bears

As financial disintermediation continues, large-scale and high-quality businesses are more likely to access lower-cost direct financing, which will weaken CCB's customer base and its bargaining power over these customers.

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News

Trading Information

Previous Close Price
HKD 4.78
Day Range
HKD 4.764.92
52-Week Range
HKD 4.015.70
Bid/Ask
HKD 4.86 / HKD 4.87
Market Cap
HKD 1.22 Tril
Volume/Avg
466.5 Mil / 309.6 Mil

Key Statistics

Price/Earnings (Normalized)
3.37
Price/Sales
1.45
Dividend Yield (Trailing)
8.83%
Dividend Yield (Forward)
8.83%
Total Yield
8.68%

Company Profile

As one of the big four banks, China Construction Bank is headquartered in Beijing. The bank went public on the Hong Kong Stock Exchange in 2005 and listed shares in mainland China in 2007. Central Huijin Investment, China's sovereign wealth fund manager is the largest shareholder with a 57% share. Fullerton Financial Holdings (a subsidiary of Temasek) is the company's second-largest shareholder with a 4.99% stake. CCB strives to provide customers with comprehensive financial services. Corporate banking, retail banking, and wholesale banking business segments accounted for 36%, 57%, and 7% of profit before tax, respectively, in 2022.
Sector
Financial Services
Industry
Banks - Diversified
Stock Style Box
Large Value
Total Number of Employees
376,871

Competitors

Valuation

Metric
00939
01658
601288
Price/Earnings (Normalized)
3.374.396.72
Price/Book Value
0.370.460.65
Price/Sales
1.451.572.42
Price/Cash Flow
4.8710.88
Price/Earnings
00939
01658
601288

Financial Strength

Metric
00939
01658
601288
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
00939
01658
601288
Return on Assets (Normalized)
0.89%0.58%0.72%
Return on Equity (Normalized)
11.75%11.69%11.67%
Return on Invested Capital (Normalized)
Return on Assets
00939
01658
601288
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