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China Construction Bank (601939): Steady performance growth optimistic about development potential

China Construction Bank (601939): Steady performance growth optimistic about development potential

Event: On March 27, China Construction Bank released its 2018 annual report, and the company achieved operating income of 658.9 billion yuan in 2018, +5 over the same period.

99%; realized net profit of 25.47 million yuan, +10 for ten years.

11%.

Steady growth in performance and net interest income contribution.

China Construction Bank realized a net profit of RMB 254.7 billion in 2018, +5 per year.

1%, the growth rate decreased by 1 compared with the first three quarters.

3 units.

The performance increase was mainly due to the rapid growth of net interest income (+7 per year).

5%), the average balance of interest-earning assets, and the contribution rate of net interest margin to performance growth were 5 respectively.

3%, 8.

7%.

Net interest margin 2.

31% (2018H: 2.

34%; 2017: 2.

21%), benefiting from the loan interest rate, the deposit interbank budget interest rate increased (2018: 4).

34%, 3.

34%; 2017: 4.

18%, 2.

64%).

The bank’s capital strength has increased, and the potential for scale expansion is large.

As of the end of 2018, the total assets of CCB were 23.

2 trillion, +5 per year.

0% (Q3 2018: 5.

9%).

The loan balance is 13.

4 trillion, +6 per year.

3% (2018Q3: 7.

4%), the growth rate decreased by 1 compared with the end of the third quarter.

1 unit.

Among them, personal housing loans4.

75 trillion, the proportion of total loans increased to 34.

5%.

CCB has made great efforts in the housing leasing market to build a comprehensive housing leasing service platform. The platform’s online offset has exceeded 10 million units, and its business model and customer acquisition channels have diversified.

The company issued 83 billion trillion tier 2 capital bonds to supplement its capital, and its capital adequacy ratio further increased to 17.

19%, ranking first among listed banks, so providing strong support for business expansion.

From the deposit side, the balance of the deposit is 17.

2 trillion, +4 per year.

6%, an increase of 0 compared with the end of the third quarter.2 averages, accounting for 80 of total debt.

6%.

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The deposit-loan ratio exceeds 74% (2018Q3: 80%), and the deposit side has a comparative advantage.

The non-performing rate has decreased, and the non-conforming standards have been strict.

CCB adverse hypertension in 20181.

46%, a drop of 1 BP from the previous month, more than 3 BP.

The balance of non-performing loans was RMB 20,900, plus ten years.

5%, a growth rate of 1 lower than the end of the third quarter.

Two in total, concerned about the growth rate of loans fell 0 chain.

9 averages to 6.

0%.

The growth rate of loans overdue for more than 90 days has improved, +7 a year.

3% (2018H: 0.

1%), accounting for 0% of total loans.

9% (2018H: 1.

0%).

The non-performing loan recognition standards are strict, and the non-performing loan expansion has dropped to 60.

1% (2018H: 65.

7%).

The provision coverage ratio was 208%, an increase of 13 percentage points from the end of the third quarter, and the ability to offset risks was significantly strengthened.

Investment suggestions: Construction Bank’s interest margin improvement, steady performance growth; high capital adequacy ratio, accelerated expansion of scale; non-performing rate continued to decline, non-performing recognition standards are strict, and asset quality is better.

It is expected that the net profit attributable to the mother in YOY in 19/20 will be 5 respectively.

0% / 4.

9%, corresponding to BVPS8.

7/9.

4 yuan, the current price is 0.

80/0.

73 times PB.

Target price for 2019 is 8.

2 yuan, corresponding to 0.

95 times PB, 19% of current price space, given an “overweight” rating.

Risk reminders: the risk of macroeconomic downturn; the policy risk of strict supervision; the credit risk; the market risk.