[ET Net News Agency, 11 January 2018] Nomura Research lifted its target price for China
Construction Bank (CCB)(00939) to HK$8.68 from HK$7.99, and maintained its "buy" rating.
The research house said CCB recorded the cheapest deposit cost (at 1.34% p.a. by 1H
2017) among the big four banks (ICBC: 1.43%; ABC: 1.36% and BOC: 1.52%) due to its strong
deposit-taking capacity with corporates.
On the asset side, however, CCB recorded lower loan yield (4.05% vs ICBC at 4.13%),
partially on a larger mortgage book, and lower interbank asset yield (2.60% vs ICBC at
3.23%), likely on longer tenor and slower repricing, as per our estimates.
Taking into account CCB's low LDR of 77% vs mid-cap average of 92% by 9-month 2017, and
potentially lower RRR, Nomura raised its FY2018/19 loan forecasts by 1pp each year to
7%/6% y-y for FY2018/19 to reflect likely strong loan growth of CCB. (KL)