Depth-Company-Construction Bank (601939): Comprehensive Finance Helps Consolidate the Debt Advantage of the Real Economy

Depth * Corporate * Construction Bank (601939): Comprehensive Finance Helps Consolidate the Debt 武汉夜网论坛 Advantage of the Real Economy

CCB’s comprehensive layout is leading the industry, accumulating abundant large-scale customers and government resources, and it is easier to obtain low-risk high-quality assets than its peers. The company makes full use of fintech to serve the real economy.

At the same time, as a regular large bank, CCB has reduced its debt-side advantages, stable funding sources and reduced costs.

The company’s overall profitability is strong. The growth rate of net profit and ROE level in the first quarter of 2019 ranked first among the four major banks.

  Maintain BUY rating on CCB.

  The main points of the support level are strong profitability, and integrated financial services help the real economy.

CCB’s comprehensive layout is leading, and its profitability remains the leader in the industry. Net profit continued to increase in the first quarter of 20194.

80%, annualized ROE is 15.

90%, ranking first among the four major banks.

The company uses fintech to serve the real economy. In 2018, the balance of inclusive financial loans was 631 billion yuan, an increase of 50 in ten years.

78%, with the rest ranking first in the industry; innovative “small and micro fast loan” series of products and platform-based business model, extended loans of more than 710 billion, covering 550,000 small and micro enterprises.

  Rich in public resources and consolidated on the debt side, CCB has continuously accumulated abundant large-scale customer and government resources, and its extensive network layout has transformed itself into a natural customer acquisition base in the retail market. Therefore, CCB has abundant resources on the asset side, which is easier to obtain than banksRisky quality assets.

The company’s debt-side structure has obvious advantages, and deposits have maintained rapid growth. The proportion of deposits in the first quarter of 2019 reached 81.

6%, demand deposits account for 51.

5%, the absolute proportion is still leading in the industry.

The resistance side has better storage capacity, and stable funding sources bring cost advantages.

The company saved interest-bearing debt costs in 20181.

64%, only four banks are higher than Agricultural Bank of China (1.

62%).

  Strict risk control and stable asset quality.

CCB has strict risk control. At the end of 2018, the loan / non-performing loan ratio overdue for more than 90 days was 60.

1%, bad identification is strict.

The company’s asset quality remained stable, and the non-performing ratio in the first quarter of 19 was flat at 1 compared with the fourth quarter of 2018.

46%, the bad generation rate ranks the industry level, down 8BP from the chain to 0.

68%.

At the same time, the company’s ability to withstand empire risks was further strengthened, and the provision coverage ratio at the end of the 1st quarter of 19 increased by 5 as compared with the fourth quarter of 18th.

86 averages to 214.

2%.

  It is estimated that we maintain CCB’s EPS1 for 2019/2020.

07/1.

The forecast of 14 yuan corresponds to a net profit growth rate of 5.

5% / 6.

5%, which currently corresponds to zero net subsidies in 2019/2020.

89/0.

82x, corresponding to a price-earnings ratio of 6.

94/6.

52x, maintain CCB buy rating.

  The main risks faced by the rating were that the economic downturn exceeded expectations, and strict financial supervision exceeded expectations.

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