---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 316238
conversation_id: 8d6269de-906d-4bf1-bd7a-ad2f161e56ef
citations: 21
created: 2026-05-31 21:58:22Z
---

# Provide a one‑year narrative of CCB, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# China Construction Bank (939 HK / 601939 CH) — One-Year Narrative (May 2025 → May 2026)

The trailing twelve months for **China Construction Bank ("CCB")** were defined by a single tension that the market eventually resolved in CCB's favor: a slow-bleeding fundamental story (compressing NIM, sub-trend earnings growth, mild dividend trim) running into an overwhelming flow-driven re-rating of Chinese SOE banks as global investors chased yield, policy support and "safe-haven" stability. The H-share closed the period near its highest level in over a decade, but the path was non-linear — punctuated by a major state-led capital injection, an analyst-rating roundtrip, a CFO change, and a Q1 26 profit-taking wobble.

---

## 1. May–June 2025: Sell-side cautious into a re-rating; state recap completed

Entering the period, the H-share was already trading at multi-year highs on China's broader "national team" / high-dividend SOE bank rally. CLSA, in a 6 June 2025 transfer-of-coverage note, carried CCB (939 HK) at an **Outperform rating with a target price of HK$6.20 against a then-current price of HK$7.30** — i.e., a Buy-rated name trading ~18% above the analyst's fair value, signalling the sell-side view that the run had outstripped fundamentals **[1]**.

The major event in this window was the long-trailed **state recapitalisation of the Big-4 SOE banks via special government bonds**. CCB completed the issuance of **11.59 billion A-shares at CNY9.06/share on 25 June 2025** (originally announced 30 March), confirming a sizeable capital top-up at the H1 boundary **[6]**. The injection was capital-positive but EPS-/ROE-dilutive at the margin, and reshaped the discussion around CCB's medium-term ability to grow risk-weighted assets in support of national lending priorities.

By **10 July 2025** the H-share hit a fresh 52-week high of **HK$8.49, up +67.5% over twelve months**, leading a broad Chinese bank rally that also dragged BOC, ICBC and PSBC to new highs **[20]**.

## 2. July–August 2025: Bull/bear ratings tug-of-war into 1H25 results

Sell-side opinion split sharply at the peak.

- **22 July 2025** — **Deutsche Bank initiated CCB at Buy** with a HK$10.50 target (28% upside) and CCB-A at Buy with CNY11.40 (21% upside), a vote of confidence in the SOE-bank dividend trade and Beijing-backed capital framework **[8]**.
- **29 July 2025** — **UBS (May Yan) downgraded** ICBC, CCB-A (601939) and Bank of China to **Neutral from Buy**, citing valuation; she lifted CCB-A's TP only marginally to CNY9.85, a tacit acknowledgement that the easy money had been made **[9]**.

**1H25 results (released 29 August 2025)** captured the underlying erosion:

| Metric (1H25) | Value | YoY Δ |
|---|---|---|
| Net income attributable | CNY 162.08bn | vs CNY 164.33bn (slight decline) **[7]** |
| Net interest income | CNY 286.71bn | (3)% **[7]** |
| Net interest margin | **1.40%** | vs 1.54% **[7]** |
| NPL ratio | 1.33% | vs 1.34% YE24 **[7]** |
| CET1 ratio | 14.34% | vs 14.48% YE24 **[7]** |
| Interim dividend | CNY 0.1858/sh | **vs CNY 0.197 (cut ~6%) [7]** |

On the call, President Zhang Yi framed the half as a "marginal improvement" — **operating income +2.95% and pre-provision profit +3.37%**, with management highlighting industry-leading ROA, ROE, NIM and CAR positioning **[2]**. CFO Sheng Liurong addressed NIM directly: **"in Q2, our NIM was 1.4%... there was a quarter-on-quarter narrowing" of only ~1bp**, explaining that aggressive deposit re-pricing (deposit rates down ~32bp, total liability cost down ~34bp) was largely offsetting the LPR-driven 45bp drop in asset yields **[3]**. Management also reiterated that **"NPL ratio is only 1.33%, a decrease of one bp from 2024"** and CAR of 14.34% **[4]**, but the interim dividend cut was a soft negative signal at a moment when the entire SOE-bank thesis rested on yield.

The shares pulled back to **HK$7.51** on the print **[7]** as the market digested the gap between sell-side BUY-with-low-TPs (CLSA HK$6.20 [1]) and BUY-with-high-TPs (DB HK$10.50 [8]).

## 3. September–November 2025: Q3 disappointment + selective re-rating

The September sector review noted that Chinese banks staged "a sector-wide rebound in Q2" on fee income and trading gains, but NIM pressure persisted and asset quality in retail/SME segments was deteriorating, a backdrop that fit CCB's specific data **[21]**.

**3Q25 (30 October 2025)** reinforced the bearish read:

- Net income attributable **CNY 95.28bn (+4% YoY)** — supported by lower provisions, not by core revenue **[10]**
- **NII CNY 140.90bn, –3% YoY**; **NIM 1.36%, –16bps YoY** **[10]**
- NPL ratio 1.32% (–2bps YoY); CET1 14.36% (vs 14.10% prior year) **[10]**

The post-results sector review highlighted that **"CCB disappointed with worst-than-expected NIM contraction"** in Q3, while peers — particularly BOC — staged surprise NIM rebounds, making CCB the underperformer of the Big-4 on funding-cost management **[11]**.

Despite the relative miss, sentiment held up because (a) absolute earnings were still growing, and (b) the global dividend/yield trade was intact. **UOB Kay Hian upgraded CCB to Buy from Hold on 27 November 2025 with a HK$9.60 target** (18% upside) **[12]**, partially offsetting earlier UBS caution.

## 4. December 2025 – February 2026: Quiet consolidation

The H-share consolidated in the HK$7.50–8.40 range. Sector data showed China commercial-bank Q4 industry NIM **steady at 1.42% (flat q/q)** and NPL improving to 1.50% (from 1.52%), suggesting the worst of the NIM compression cycle was behind the sector — a key prerequisite for the next leg of the bank trade.

## 5. March 2026: FY25 results, BofA upgrade, CFO change

**FY25 results (27 March 2026)** were a modest beat on bottom line and a small miss on NII — but the cash-return story finally turned:

| Metric (FY25) | Value | vs Consensus / YoY |
|---|---|---|
| Net income attributable | **CNY 338.91bn** | vs FactSet CNY 336.31bn (beat) **[13]** |
| Net interest income | CNY 572.77bn | vs FactSet CNY 575.16B (small miss) **[13]** |
| NIM (FY) | **1.34%** | vs FactSet 1.36% **[13]** |
| NPL ratio | **1.31%** | improved from 1.34% **[13]** |
| CET1 ratio | **14.63%** | up from 14.48% (post-recap benefit) **[13]** |
| Final dividend | CNY 0.2029/share | vs CNY 0.206 (small cut) **[13]** |

Critically, the post-results read-across from Chinese-bank executives flagged that **"NIM declining at a slower pace... partly owing to repricing of maturing bank deposits"** — with as much as CNY60T in high-rate term deposits rolling off, and ICBC even projecting an NIM improvement, the first since 2018 **[14]**. CCB's CFO Sheng was directly quoted that NIM was decelerating sequentially **[14]**. President Zhang's outlook commentary reiterated that **"In 2026, we're going to continue with the political and fundamental nature of our business... to prevent financial risk and enhance our international competitiveness"** — a continuity message rather than a strategic pivot **[5]**.

Two corporate signals followed:

- **30 March 2026 — BofA (Winnie Wu) upgraded CCB to Buy from Neutral**, raising the target from HK$8.97 to **HK$9.12 (15% upside) at HK$7.95 reference** **[15]**. This bracketed the rest of the sell-side at a more bullish stance, validating the NIM-trough narrative.
- **31 March 2026 — CFO Sheng Liurong resigned ("due to age")** **[16]**. The departure of the CFO who had personally driven the deposit-cost reduction narrative for two consecutive cycles introduced incremental "key-person" uncertainty, but the share price was unchanged at HK$8.39 on the day, suggesting markets viewed it as orderly succession **[16]**.

## 6. April 2026: New 52-week highs, then a 1Q26 wobble

April delivered the **best stretch of price action in the entire one-year window** — a clean breakout led by Big-4 SOE banks against a dovish macro backdrop:

- **20–21 April 2026** — CCB H-share **HK$8.85–8.96, +41–43% over 52 weeks**, leading a broad Chinese-bank breakout that also pushed ICBC, BOC and CITIC Bank to new 52-week highs **[19]**.
- **27 April 2026** — CCB H **HK$8.91, +38.6% 52-week**, alongside PetroChina and Weichai at peaks — confirming the SOE high-dividend rotation as the dominant macro trade **[19]**.
- **30 April 2026** — Asian-equity new-high list still featured **CCB at HK$8.97 (+43.9% 52-week)** **[19]**.

The wobble came with **1Q26 results (released 29 April 2026)**:

- Net income attributable **CNY 86.29bn, +4% YoY** (vs CNY 83.35bn) **[17]**
- **NII CNY 153.47bn vs CNY 141.92bn** prior year — a meaningful re-acceleration **[17]**
- **NIM 1.36% vs 1.41% YoY but +2bp vs FY25 1.34%** — the first sequential NIM expansion in over a year **[17]**
- NPL ratio 1.31% (flat vs end-25); **CET1 14.26% vs 13.98% YoY** **[17]**

Despite the sequential NIM improvement, the H-share **fell 2.3% to HK$8.78 on the day** as the market focused on **"higher credit losses/impairments weighing on sentiment"** — though analysts conceded that "NII and fee income both improved sequentially supported by a better NIM" **[18]**. In effect, the market had already priced the NIM-trough thesis (per BofA's late-March upgrade) and was now sensitive to provisions and asset quality at the retail/SME edge — the precise risk the September sector review had flagged six months earlier **[21]**.

---

## How performance, conditions and actions reshaped sentiment & valuation

| Driver | Direction | Sentiment / valuation effect |
|---|---|---|
| **State recap (CNY-103bn-equivalent 11.59bn A-share issuance @ CNY9.06)** | Capital-positive, EPS-dilutive | Removed tail risk on CET1; capped near-term EPS upside — net neutral-to-positive **[6]** |
| **NIM compression** (1.54% → 1.40% → 1.36% → 1.34% → 1.36%) | Negative for ~3 quarters, then **trough confirmed in 1Q26** | The single biggest variable; trough call drove BofA upgrade **[13][14][15][17]** |
| **Interim & final dividend cuts** (CNY 0.197 → 0.1858 interim; CNY 0.206 → 0.2029 final) | Mild negative | Diluted the pure-yield thesis but cuts were small; payout ratio retained **[7][13]** |
| **Loan growth** (+6.2% in 1H25; sector decelerated) | Moderate | Corporate-led, retail demand weak — typical SOE-bank profile **[2]** |
| **NPL stability** (1.34% → 1.33% → 1.32% → 1.31%) | Positive | Headline-stable, though absolute NPL Yuan amounts grew with loan book **[4][13][17]** |
| **Fee income recovery** (+4% in 1H25; +25% non-interest income contribution rising) | Positive | Wealth management & agency sales offset trading drag **[2]** |
| **Sell-side ratings arc** (CLSA cautious TP HK$6.20 → DB Buy HK$10.50 → UBS-A downgrade → UOB upgrade → BofA upgrade) | Net positive over the year | Consensus migrated from "expensive Outperform" to "Buy with HK$9+ targets" **[1][8][9][12][15]** |
| **CFO Sheng's resignation** | Mild incremental risk | Orderly; no price impact **[16]** |
| **Macro: global yield search & RMB stability** | Major positive | The dominant factor — SOE banks became a low-vol, high-yield, policy-backed proxy for "China stability"; share-price grind from HK$7.30 (Jun-25) to HK$8.97 (Apr-26), **+~23%**, with peak 52-week gain of +43% **[19][20]** |

**Net takeaway**: CCB's twelve months were a textbook case of a **valuation re-rating outrunning a soft fundamental backdrop**, then **fundamentals catching up just in time** to validate the price. The starting point was a Buy-rated stock with a sell-side target *below* the market (CLSA HK$7.30 vs TP HK$6.20) **[1]**; the ending point was a stock at HK$8.78–8.97 with consensus targets in the HK$9+ range and a NIM that had just inflected upward for the first time in over a year **[15][17]**. The valuation expansion was carried by flow, dividend yield and policy support; the fundamental confirmation arrived late but arrived — leaving the stock vulnerable, by April 2026, to incremental misses on the **credit-loss / asset-quality** leg that had been a persistent sector concern throughout the year **[18][21]**.

---
**Sources**
[1] CLSA — *China banks (Transfer of coverage)* — 6 Jun 2025 — 607961079LinqAlpha.PDF
[2] CCB 1H25 Earnings Call (Q2 2025) — 29 Aug 2025
[3] CCB 1H25 Earnings Call — NIM Q&A
[4] CCB 1H25 Earnings Call — NPL & CAR
[5] CCB FY25 Earnings Call (Q4 2025, 27-March-2026) — President Zhang outlook
[6] StreetAccount — A-share issuance completion (11.59B @ CNY9.06) — 25 Jun 2025
[7] StreetAccount — CCB H1 results recap — 29 Aug 2025
[8] StreetAccount — Deutsche Bank initiates HK Big-4 banks — 22 Jul 2025
[9] StreetAccount — UBS upgrades 3328.HK; downgrades 601939.CH et al — 29 Jul 2025
[10] StreetAccount — CCB Q3 results — 30 Oct 2025
[11] StreetAccount Sector Review — China Banking Q3 Earnings — 20 Nov 2025
[12] StreetAccount — UOB Kay Hian upgrade — 27 Nov 2025
[13] StreetAccount — CCB FY25 results — 27 Mar 2026
[14] StreetAccount — "Chinese banks see NIM pressures easing" (Nikkei digest) — 30 Mar 2026
[15] StreetAccount — BofA upgrade to Buy, TP HK$9.12 — 30 Mar 2026
[16] StreetAccount — CFO Sheng Liurong resignation — 31 Mar 2026
[17] StreetAccount — CCB Q1 26 results — 29 Apr 2026
[18] StreetAccount — Quick Take: CCB –2.3% post Q1 — 30 Apr 2026
[19] StreetAccount — Asian/HK 52-week highs lists — 20–30 Apr 2026
[20] StreetAccount — Hong Kong 52-week highs (CCB HK$8.49, +67.5% YoY) — 10 Jul 2025
[21] StreetAccount Sector Review — China Banking Q2 Earnings — 11 Sep 2025

## Citations

- [1] **607961079LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961079LinqAlpha.PDF>
- [2] **China Construction Bank Corporation, Q2 2025** · external
- [3] **China Construction Bank Corporation, Q2 2025** · external
- [4] **China Construction Bank Corporation, Q2 2025** · external
- [5] **China Construction Bank Corp., Q4 2025 Earnings Call, 27-March-2026 5** · external
- [6] **China Construction Bank completes issuance of 11.59B A-shares at CNY9.06/share; announced 30-Mar** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4307122&_doc_date=2025-06-25&_doc_product=SA>
- [7] **China Construction Bank reports H1 net income attributable CNY162.08B vs year-ago CNY164.33B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4388712&_doc_date=2025-08-29&_doc_product=SA>
- [8] **Deutsche Bank initiates 1288.HK, 1398.HK, 1658.HK, others** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4326582&_doc_date=2025-07-22&_doc_product=SA>
- [9] **UBS upgrades 3328.HK; downgrades 3968.HK, 601398.CH, 601939.CH, and 601988.CH** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4336267&_doc_date=2025-07-29&_doc_product=SA>
- [10] **China Construction Bank reports Q3 net income attributable CNY95.28B, +4% vs year-ago CNY91.45B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4442874&_doc_date=2025-10-30&_doc_product=SA>
- [11] **StreetAccount Sector Review - China Banking Q3 Earnings** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4481215&_doc_date=2025-11-20&_doc_product=SA>
- [12] **China Construction Bank upgraded to buy from hold at UOB Kay Hian Securities** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4489478&_doc_date=2025-11-27&_doc_product=SA>
- [13] **China Construction Bank reports FY net income attributable CNY338.91B vs FactSet CNY336.31B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4612210&_doc_date=2026-03-27&_doc_product=SA>
- [14] **Chinese banks see NIM pressures easing, but outlook remains challenging** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4615211&_doc_date=2026-03-30&_doc_product=SA>
- [15] **China Construction Bank upgraded to buy from neutral at BofA** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4613528&_doc_date=2026-03-30&_doc_product=SA>
- [16] **China Construction Bank CFO Sheng Liurong resigns due to age, effective today** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4615695&_doc_date=2026-03-31&_doc_product=SA>
- [17] **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>
- [18] **Quick Take: China Construction Bank fell (2.3%) post Q1 results** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4650146&_doc_date=2026-04-30&_doc_product=SA>
- [19] **StreetAccount Summary: Asian stocks reaching new 52-week highs/lows** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4649542&_doc_date=2026-04-30&_doc_product=SA>
- [20] **StreetAccount Summary: Hong Kong Stocks reaching new 52-week highs/lows** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4317119&_doc_date=2025-07-10&_doc_product=SA>
- [21] **StreetAccount Sector Review - China Banking Q2 Earnings** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4398864&_doc_date=2025-09-11&_doc_product=SA>

