---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 190656
conversation_id: a2d023bb-a4ca-4953-8e28-3ad37205a797
citations: 0
created: 2026-05-31 18:47:12Z
---

# Is CLSA incrementally more positive/negative on CCB. If so, why?

## CLSA's Incremental View on China Construction Bank (CCB, 939 HK)

**Bottom line:** CLSA has been **incrementally MORE POSITIVE on CCB on a relative basis (vs. peers within China banks)** through 2025, even though the headline rating (O-PF) and HK target price (HK$6.20) have not been mechanically raised. The most recent action — a 6 June 2025 transfer-of-coverage to analyst Ding Luo — kept rating and TP unchanged, but the stock has rallied **above** the existing target, signaling the analyst's constructive narrative has run ahead of the formal valuation framework rather than that the view has soured.

### Latest formal stance (June 2025)

On 6 June 2025, CLSA transferred coverage of the China financials book — including CCB-H (939 HK) and CCB-A (601939 CH) — to **Ding Luo** following a team-structure change; ratings and target prices were carried over unchanged [1].

| Stock | Rating | Current price | Target price | Implied direction |
|---|---|---|---|---|
| CCB (939 HK) | O-PF | HK$7.30 | HK$6.20 | TP now **below** spot (–15%) [2] |
| CCB-A (601939 CH) | O-PF | Rmb9.00 | Rmb8.50 | TP slightly below spot [2] |

The HK target price of HK$6.20 has been **held flat since 25 Nov 2024** (it was previously HK$5.90 in Jun 2024, HK$5.60 in Jan 2024, HK$6.80 in May 2023) — i.e., the TP was raised twice into late-2024 and then anchored there even as the stock continued to rally [8][9]. CLSA's grading scale has been O-PF since 28 June 2024 when ratings were converted from BUY/HOLD/SELL [9].

### Where the incremental positivity shows up

**1. Explicit "more positive on CCB" call (26 Feb 2025, "Today is another day"):**
> *"We are more positive on CCB (H) due to a relatively higher dividend yield, and CMB (H) due to its high beta nature and solid fundamentals."* [3]

This is the cleanest direct incremental positive statement — CCB singled out among the H-share state banks specifically on dividend-yield grounds.

**2. Top-of-deck dividend yield ranking (12 Jan 2025, "2025 Outlook: Redux+"):** CCB (H) carried the **highest dividend yield in CLSA's coverage at 7.3%**, ahead of ICBC-H (6.8%), Bank of Jiangsu (5.4%), Bank of Chengdu (5.3%) and CMB-A (5.1%) [4][10]. CLSA closed the section with the formal recommendation:
> *"Due to these considerations, we recommend ICBC (H) and CCB (H), as well as CMB (A), Bank of Jiangsu and Bank of Chengdu."* [5]

CCB sits in the top of the preferred list — but with a caveat: CLSA flagged CCB-H as having a **"larger" dilution risk** from forthcoming state-bank recapitalisation, the same caveat applied to ICBC-H [10].

**3. Recap dilution turned out to be the lightest among the four (30 Mar 2025, "Recapitalisation plans unveiled"):** When the actual recap details landed, CLSA called out CCB favourably within the four-bank cohort (CCB, BOC, BOCOM, PSBC, Rmb520bn total):
> *"CCB announced an A-share private placement of no more than Rmb105bn with the MoF … the proposed price is Rmb6.05, implying 8.8%/49% premiums over Friday's A/H-share closing prices, or a 0.73x 2024 PB. We estimate the CET1 ratio to rise by 48bps to 14.97% based on 2024 numbers."* [6]
> *"CCB will have the smallest dilution. It also has the smallest premium over the A-share closing price in its issuing price."* [7]

So the principal risk flagged in the January Outlook (dilution) ended up being the **least punitive for CCB** in the actual recap, which is implicitly a positive read-through — the cohort risk landed lighter on CCB than feared.

**4. "Get the money in" (23 Jan 2025):** CCB-H listed at HK$6.08 with O-PF [12] — i.e., between Jan and June 2025, the H-share rallied from HK$6.08 → HK$7.30 (+20%) while CLSA's TP remained HK$6.20, confirming the call worked.

### What the "incremental positive" is NOT

It is **not** a rating upgrade, **not** a target price raise, and **not** an explicit step-up in conviction (no move to HC O-PF). The headline scaffolding (rating, TP) has been static since late November 2024 [8]. The incremental positivity is **commentary-driven**, expressed via:
- Explicit "we are more positive" wording in February [3];
- Top-of-list recommendation in January with highest dividend yield [4][5];
- Favourable read-through on the recap mechanic in March [7].

A more cautious reading would note that **target price has not been raised despite a sustained rally**, leaving CCB-H now trading ~18% **above** the TP [2], which structurally limits how much further upside the formal model implies. The new analyst (Ding Luo, from June 2025) inherits a structurally below-spot TP and will likely need to re-mark the framework.

### Why CLSA is positive on CCB — summary of the why

1. **Dividend yield as core anchor** — 7.3% H-share dividend yield was the highest in the China bank coverage at the January 2025 outlook [4]; this remained the explicit driver of the February "more positive" stance [3].
2. **Beneficiary of falling treasury yields** — CLSA repeatedly framed the H-share state banks as benefiting from China's collapsing 10-year yields (10y touched 1.58% on 6 Jan 2025), which reduces the required dividend yield on bank stocks and supports re-rating [9 in linked doc].
3. **Insurer accumulation tailwind** — Ping An Group had pushed its position in CCB-H to **5.01% as of 20 Dec 2024**, signalling institutional dry-powder support [Jan 6 note].
4. **Recap risk priced lighter than feared** — CCB had the **smallest dilution** (CET1 +48bps to 14.97%) of the four recapitalised state banks, and the smallest premium in issue pricing [6][7].
5. **TLAC compliance progress** — the Rmb105bn private placement was framed by CCB as helping it meet 2028 TLAC compliance, which CLSA noted as a positive structural driver [6].

### Risks / cautious flags

- TP not raised despite share-price rally (HK$7.30 vs. TP HK$6.20) — formal upside is now negative on the framework even though the rating is O-PF [2].
- Dilution from recap is real, even if smaller than peers [6].
- Coverage transfer to a new analyst (Ding Luo) in June 2025 — the framework may be re-cut by the new analyst, so the current static TP should not be over-weighted [1].

---

**Sources**

[1] China banks (Transfer of coverage) — CLSA (6 Jun 2025) — 607961079LinqAlpha.PDF — coverage transfer narrative
[2] China banks (Transfer of coverage) — CLSA (6 Jun 2025) — 607961079LinqAlpha.PDF — ratings/TP table
[3] China Financial Sector (Today is another day) — CLSA (26 Feb 2025) — 607951662LinqAlpha.PDF — "more positive on CCB (H)" statement
[4] China financials (2025 Outlook: Redux+) — CLSA (12 Jan 2025) — 607947966LinqAlpha.PDF — CCB-H dividend yield 7.3%
[5] China financials (2025 Outlook: Redux+) — CLSA (12 Jan 2025) — 607947966LinqAlpha.PDF — preferred-list recommendation
[6] China banks sector (Recapitalisation plans unveiled) — CLSA (30 Mar 2025) — 607954420LinqAlpha.PDF — CCB Rmb105bn private placement details
[7] China banks sector (Recapitalisation plans unveiled) — CLSA (30 Mar 2025) — 607954420LinqAlpha.PDF — "CCB smallest dilution"
[8] China banks sector (Insurer accumulations) — CLSA (6 Jan 2025) — 607947609LinqAlpha.PDF — CCB-H recommendation history table
[9] China banks sector (Insurer accumulations) — CLSA (6 Jan 2025) — 607947609LinqAlpha.PDF — CCB-H rating/TP history
[10] China financials (2025 Outlook: Redux+) — CLSA (12 Jan 2025) — 607947966LinqAlpha.PDF — dividend yield vs. dilution risk table
[11] China banks sector (Recapitalisation plans unveiled) — CLSA (30 Mar 2025) — 607954420LinqAlpha.PDF — recap top-line summary
[12] China financials (Get the money in) — CLSA (23 Jan 2025) — 607948869LinqAlpha.PDF — CCB-H price/rating

