China Construction Bank: Net Profit Accelerated but Revenue Remains Weak

We retain our fair value estimate of China Construction Bank, or CCB, at HKD 6.20 per H share (CNY 6 per A share). We think CCB’s 3.4% year-on-year net profit growth in the first half of 2023 is positive and in line with expectations, helped by lower provision expenses on a largely stable credit outlook, which we think should help appease some concerns over the weakening economy and worries over rising credit risks. We remain buyers of CCB, which we view to be undervalued, trading at a historically low 0.3 times 2023 price/book value and over 10% dividend yield.