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00939 CCB
RTNominal up6.250 +0.090 (+1.461%)
Research Report

10/12/2020 17:17

{I-bank focus}DBS Research cuts CCB (00939) to HK$8.3; "buy"

[ET Net News Agency, 10 December 2020] DBS Group Research lowered its target price for
China Construction Bank (CCB) (00939) to HK$8.3 from HK$8.6 and maintained its "buy"
The research house said CCB has a strong position in infrastructure loans which
accounted for 51% of corporate loans in 1H. As China ramps up infrastructure spending,
this would support CCB's loan growth at an 11.6% CAGR in FY2020-22.
In addition, a stabilising or improving market rate would benefit CCB's profitability,
as the bank generates 76% of its revenue from the loan business. With a long history of
prudent provisioning policy, CCB's NPL coverage ratio was 217% in 3Q, way above the
regulator's requirement of 150%. Thus, there is less provisioning pressure, leading to the
potential earnings upside.
DBS cut its FY2020/21 earnings forecasts by 10%/11% to factor in higher-than-expected
provisions. (KL)

Remark: Real time quote last updated: 07/05/2021 17:59
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