Construction Bank (601939) A-Share Investment Research Analysis and Trading Recommendations

1. Core Profitability and Fundamentals
Revenue of 573.702 billion yuan in the first three quarters of 2025 (year-over-year +0.82%), net profit attributable to the parent company of 257.36 billion yuan (year-over-year +0.62%); Q3 quarterly net profit of 95.284 billion yuan (year-over-year +4.19%), margin improvement. Non-interest income increased by 14% year-over-year; income structure optimized; net interest margin under pressure but stabilizing; effective cost control.
Full-year net profit is expected to be around 339 billion yuan, with slight growth year-over-year, demonstrating strong profitability resilience.
2. Asset Quality and Risks
Non-performing loan ratio at 1.32% (year-over-year -0.02 percentage points), provision coverage ratio at 235.05% (year-over-year +1.45 percentage points), sufficient risk buffers; capital adequacy ratio at 19.24%, core Tier 1 capital adequacy ratio at 14.34%, providing a high safety margin.
Risks from real estate and local government bonds are controllable; asset quality remains stable.
3. Valuation and Dividends
Current PE (TTM) at 6.9 times, PB at 0.69 times, at historical lows; dividend yield of 5.6%, significantly higher than wealth management and deposits, highlighting long-term investment value.
4. Core Logic
Advantages: high dividend yield, low valuation, high safety margin, benefiting from steady growth and loose liquidity, strong institutional demand.
Pressures: narrowing net interest margin, relatively low revenue growth, weak cyclical elasticity.
5. Trading Recommendations
For allocation: hold long-term, benefit from dividends and valuation recovery, target price 9.5-10.5 yuan.
For trading: buy on dips at 8.7-8.9 yuan, reduce positions in batches above 9.5 yuan, stop-loss at 8.4 yuan.
Position: maintain a conservative portfolio of 10%-15%, avoid chasing highs, focus on drawdown control.
Risk Warning: macroeconomic downturn, unexpected narrowing of interest margins, asset quality fluctuations.
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