---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 214724
conversation_id: cb2fdb70-ec54-4ef6-bc8e-6207f3c6ce6b
citations: 3
created: 2026-05-31 19:03:02Z
---

# How does CCB’s valuation compare to peers, and what justifies its premium/discount?

# CCB Valuation vs. Peers — Premium/Discount Justification

## Snapshot (as of late Apr 2026)

CCB H-share (939 HK) closed at **HK$8.78** on 30-Apr-2026, having fallen 2.3% post Q1 print but still tracking ~+41.5% over the trailing 52 weeks [10][11]. On internal RMS coverage (CLSA, transferred to Ding Luo 6-Jun-2025), CCB H-share carries an **O-PF rating with a target of HK$6.20** (CCB-A: O-PF, target Rmb8.50) — meaning the market has rallied well past the desk's last published target [5]. The bank reported **Q1 2026 net income of CNY86.29B (+4% YoY), NIM of 1.36% (vs 1.41% prior-year), NPL of 1.31% flat, and CET1 14.26%** [9].

## Peer Valuation Comparison — H-Share Big Four (post-Recap, FY24 basis)

The cleanest like-for-like comp is CLSA's recap impact table covering the four state-owned banks that received MoF capital injections in Mar-2025 [1]:

| Metric (FY24A, **H-share**) | **CCB (939)** | **BOC (3988)** | **BOCOM (3328)** | **PSBC (1658)** |
| --- | --- | --- | --- | --- |
| 24 P/E (H) | **4.7x** | 5.6x | 5.5x | 5.7x |
| 24 P/B (H) | **0.49x** | 0.52x | 0.49x | 0.55x |
| 24 Div Yield (H) | **6.5%** | 5.7% | 5.9% | 5.7% |
| Post-recap P/E (H) | 4.9x | 6.2x | 6.6x | 6.9x |
| Post-recap P/B (H) | 0.50x | 0.53x | 0.52x | 0.57x |
| Post-recap Div Yield (H) | **6.2%** | 5.2% | 5.0% | 4.7% |
| CET1 ratio (post) | 14.97% | 13.06% | 11.52% | 11.07% |
| ROAE (post) | **10.57%** | 9.22% | 8.60% | 9.15% |
| EPS dilution from recap | (4.3%) | (8.5%) | (15.6%) | (17.2%) |

Cross-checked against the 2025 Outlook desk table, CLSA also cited H-share dividend yields of **CCB 7.3%, ICBC 6.8%** (intra-period spot reading) versus CMB-A 5.1%, Bank of Chengdu 5.3%, Bank of Jiangsu 5.4% [2][3].

## What the Numbers Show — Premium or Discount?

On the surface, CCB H trades at a **structural discount on P/B vs PSBC** (0.50x vs 0.57x post-recap) but is roughly **in line with BOC and BOCOM** (~0.50x range). Where CCB clearly **leads the H-share Big Four** is:

1. **Lowest P/E** in the cohort (4.9x post-recap vs BOC 6.2x / BOCOM 6.6x / PSBC 6.9x) [1].
2. **Highest dividend yield** among the H-share Big Four (6.2% post-recap vs 5.0–5.7%) [1].
3. **Highest ROAE post-recap** at 10.57% — versus single-digit ROAEs for BOC/BOCOM/PSBC [1].

So the more accurate framing: relative to the other H-listed mega-banks, **CCB H simultaneously screens cheap AND high-quality** — it is not a premium-multiple name; it is a discount-multiple name that the desk argues should not be discounted as much as it is.

## Why CLSA Recommends CCB H as a Top Pick — Justification of the "Cheapness"

CLSA explicitly names **ICBC (H) and CCB (H)** as its two preferred large-cap China bank exposures [4][8]. The justification has four legs:

### 1. Smallest dilution risk among the recapped state banks
> "PSBC will see the biggest increase in its CET1 ratio... **CCB will have the smallest dilution. It also has the smallest premium over the A-share closing price in its issuing price.**" [6]

CCB's A-share placement (Rmb105bn to MoF at Rmb6.05/sh, 0.73x 2024 PB) raises only **+3.3% in CET1 capital and adds 4.5% to the share count** — versus +12.4% capital / +18.6% shares at BOCOM and +15.8% capital / +20.7% shares at PSBC [1][7]. EPS dilution is thus capped at (4.3%) for CCB versus (15.6%–17.2%) for BOCOM/PSBC [1]. This is the single biggest reason CCB trades at a tighter "valuation drag" than its mega-bank peers post-recap.

### 2. Higher post-recap ROAE → justifies the P/B premium vs ROAE peers
At 10.57% post-recap ROAE [1], CCB sits ~135–200bps above BOC/BOCOM/PSBC — yet the H-share P/B premium over them is essentially zero. Using CLSA's Gordon-growth framework (PB = (ROE − g) / (COE − g)), CCB's superior sustainable ROE should support a wider P/B premium than the market currently awards. This is the "underappreciated quality" argument.

### 3. Yield protection in a falling rate environment
With China's 30-year treasury closing at **2.025%** at the time of the recap, well below state-bank dividend yields, CLSA sees structural demand from yield-hungry domestic capital, particularly insurers, who are mandated to recycle 30% of new premiums into A-shares — **disproportionately benefitting high-yield bank stocks like CCB** [6][8]. CCB's 6.2% H-share dividend yield post-recap is the highest in the H-listed Big Four [1].

### 4. Highest CET1 buffer — capital protection
Post-recap, CCB's CET1 ratio rises to **14.97%**, the highest of the four recapped state banks (BOC 13.06%, BOCOM 11.52%, PSBC 11.07%) [1]. CCB also explicitly cited TLAC compliance by 2028 as one driver of the placement [7]. Stronger capital reduces the probability of further dilutive raises and supports the high payout.

## Where Discounts Persist (and Are Justified)

CCB H still trades at meaningful discounts to the better-positioned segments of the China bank universe:

- **vs. CMB-A (600036)**: CMB trades at a quality premium — CLSA flags it as the natural beneficiary of property-price stabilisation and equity-market booms (~5.1% A-share div yield, no dilution risk, much higher ROE) [3][2]. CCB does not have CMB's wealth-management / retail mix.
- **vs. quality regional banks (Bank of Jiangsu, BOCD, Bank of Ningbo)**: These names carry 13–14% sustainable ROEs vs CCB's ~10.6%; their PB multiples (~0.80–0.93x) reflect that [3]. Their discount-to-CCB on dividend yield (~5.3–5.4% for Jiangsu/Chengdu vs CCB H 6.2–7.3%) is the yield premium investors pay for higher ROE/growth [2][3].
- **A-share vs H-share dual-listing arbitrage**: CCB-A trades at a meaningful premium to CCB-H (last close Rmb8.52 A vs HK$6.70 H pre-recap implied a ~49% A/H premium) [7]. This is the standard southbound liquidity / FX / dividend-tax discount and is structural, not a fundamental signal.

## Current Premium Concern — Q1 2026 Print

The 52-week +41.5% rally has driven CCB H well above CLSA's HK$6.20 last-published target [5][11]. The Q1 2026 print materially complicated the bull case:

- **NIM compressed to 1.36% (-5bps YoY)** — the structural rate-cut headwind continues [9].
- **Higher credit losses / impairments** weighed on the result and triggered the post-print 2.3% selloff, though NII and fee income improved sequentially on a better sequential NIM [10].
- Earnings still grew (+4% YoY NP) and asset quality stayed flat (NPL 1.31%) [9].

The risk now is that the post-rally H-share valuation no longer screens as cheaply: at HK$8.78, the trailing P/B is closer to ~0.65x (vs 0.49–0.50x in the recap-table snapshot) and the H-share dividend yield has compressed accordingly toward ~4.5–5.0%. The "deep value high-yield mega-bank" thesis is partially priced in.

## Bottom Line — Premium/Discount Justification

CCB H **does not trade at a fundamental premium** to its H-listed mega-bank peers on P/B; it trades **roughly in line on P/B but at the lowest P/E and highest dividend yield** of the H-share Big Four [1]. The internal CLSA framework justifies this positioning as **underpriced rather than over-priced**, with the bull case resting on four pillars: (i) smallest recap dilution [6][7], (ii) highest post-recap ROE [1], (iii) highest dividend yield in a falling-rate environment [3][6], and (iv) strongest CET1 buffer [1]. Where CCB trades at a **justified discount** is to higher-ROE names (CMB, quality regional banks) whose business mix and growth genuinely warrant 0.80–0.93x P/B multiples [2][3]. Post the +41.5% 52-week rally and the Q1 2026 NIM/credit-cost print, that valuation gap to peers has narrowed materially, and the deep-value cushion has thinned [9][10].

---
**Sources**
[1] China banks sector (Recapitalisation plans unveiled) — CLSA (30 Mar 2025) — 607954420LinqAlpha.PDF
[2] China financials (2025 Outlook: Redux+) — CLSA (12 Jan 2025) — Dividend yield table — 607947966LinqAlpha.PDF
[3] China financials (2025 Outlook: Redux+) — CLSA (12 Jan 2025) — H-share div yield comparison — 607947966LinqAlpha.PDF
[4] China financials (2025 Outlook: Redux+) — CLSA (12 Jan 2025) — Top picks rationale — 607947966LinqAlpha.PDF
[5] China banks (Transfer of coverage) — CLSA (6 Jun 2025) — Rating & TP table — 607961079LinqAlpha.PDF
[6] China banks sector (Recapitalisation plans unveiled) — CLSA (30 Mar 2025) — Implications & dilution ranking — 607954420LinqAlpha.PDF
[7] China banks sector (Recapitalisation plans unveiled) — CLSA (30 Mar 2025) — CCB issuance detail — 607954420LinqAlpha.PDF
[8] China financials (Get the money in) — CLSA (23 Jan 2025) — Top picks ICBC/CCB — 607948869LinqAlpha.PDF
[9] StreetAccount — CCB Q1 net income CNY86.29B, +4% YoY (29 Apr 2026)
[10] StreetAccount — CCB fell (2.3%) post Q1 results on credit losses (30 Apr 2026)
[11] StreetAccount — HK Stocks 52-week highs/lows summary (30 Apr 2026)

## Citations

- [9] **China Construction Bank reports Q1 net income attributable CNY86.29B, +4% vs year-ago CNY83.35B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4646499&_doc_date=2026-04-29&_doc_product=SA>
- [10] **Quick Take: China Construction Bank fell (2.3%) post Q1 results, higher credit losses/impairments weighing on sentiment** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4650146&_doc_date=2026-04-30&_doc_product=SA>
- [11] **StreetAccount Summary: Hong Kong Stocks reaching new 52-week highs/lows** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4650077&_doc_date=2026-04-30&_doc_product=SA>

