CHINA CONSTRUCTION BANK CORPORATION IMPROVED CREDIT QUALITY IN Q4
CHINA CONSTRUCTION BANK CORPORATION is a commercial bank. The Bank operates its businesses through corporate banking businesses, including corporate deposit, corporate credit loan, asset custody, enterprise annuity, trade financing, international settlement, international financing and value-added services, among others, personal banking businesses, including personal deposit, loan, bank card services, private bank services, foreign exchange trading and gold trading services, among others, and capital business. The Bank operates its businesses in domestic and overseas markets.
For its fourth quarter, narrow-moat China Construction Bank reported 9% and 11.6% year-on-year growth in revenue and net profits, respectively, slightly slowing from 9.3% and 12.8% in the first three quarters of 2021. The 11.6% growth in net profits exceeded our expectation for high-single-digit growth thanks to lower-than-expected credit costs.
The results highlighted accelerating growth in net interest income and fee income, faster-than-peers deposit growth, and improved credit quality. We believe the results reflect CCB’s strong deposit base, prudent operations, and recovery in fee income related to wealth management.
The stock is trading at a historically low 0.45 times forward price/book value and offers a nearly 8% dividend yield. The dividend increased 12% to CNY 3.64 per 10 shares. CCB has maintained a steady payout ratio of 30%-31% since 2015, and we expect the dividend will steadily increase as net profits grow.
Return on equity increased 43 basis points to 12.55% for the first time in the past 10 years. Rental housing, inclusive finance, and technology were CCB’s three top strategic focuses, and we expect such initiatives to translate to better growth momentum and higher operating efficiency for the bank in the long run.
Given its inherent strength in infrastructure loans and mid-to-long-term corporate loans, we expect the bank will benefit more than peers from the front-loaded easing policies in the first half.
What do you guys think?
If you wish to leverage on this consider using DLCs
$CCB(00939.HK$
5x short $CCB 5xShortSG231214(DZYW.SG$
5x long $CCB 5xLongSG240807(DWCW.SG$
For its fourth quarter, narrow-moat China Construction Bank reported 9% and 11.6% year-on-year growth in revenue and net profits, respectively, slightly slowing from 9.3% and 12.8% in the first three quarters of 2021. The 11.6% growth in net profits exceeded our expectation for high-single-digit growth thanks to lower-than-expected credit costs.
The results highlighted accelerating growth in net interest income and fee income, faster-than-peers deposit growth, and improved credit quality. We believe the results reflect CCB’s strong deposit base, prudent operations, and recovery in fee income related to wealth management.
The stock is trading at a historically low 0.45 times forward price/book value and offers a nearly 8% dividend yield. The dividend increased 12% to CNY 3.64 per 10 shares. CCB has maintained a steady payout ratio of 30%-31% since 2015, and we expect the dividend will steadily increase as net profits grow.
Return on equity increased 43 basis points to 12.55% for the first time in the past 10 years. Rental housing, inclusive finance, and technology were CCB’s three top strategic focuses, and we expect such initiatives to translate to better growth momentum and higher operating efficiency for the bank in the long run.
Given its inherent strength in infrastructure loans and mid-to-long-term corporate loans, we expect the bank will benefit more than peers from the front-loaded easing policies in the first half.
What do you guys think?
If you wish to leverage on this consider using DLCs
$CCB(00939.HK$
5x short $CCB 5xShortSG231214(DZYW.SG$
5x long $CCB 5xLongSG240807(DWCW.SG$
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昇禄 : Q1 earning release today… let’s see