Morgan Stanley: Maintains a "buy" rating on China Construction Bank Corporation (00939) with a target price of HKD 9.5.

Morgan Stanley released a research report stating that China Construction Bank Corporation (00939) management indicated that the profitability of consumer loans, mortgages, and large corporate loans is tending to stabilize. If the loan market quoted interest rate (LPR) is not significantly lowered in 2026, the profitability is expected to remain stable. Morgan Stanley maintains a "buy" rating on Construction Bank with a target price of HKD 9.5. The bank expects that the narrowing of net interest margin for China Construction Bank Corporation in 2026 will decrease, with pressure mainly concentrated during the first quarter when loans are repriced. Around 60% of mortgage loans will be repriced on January 1, 2026. Management believes that the net interest income in 2026 is expected to turn positive, which will support revenue growth. The bank stated that after regular reassessment of property prices, the loan-to-value ratio of mortgage loans exceeds 40%, and they are satisfied with the credit quality of current mortgage loans. Management expressed satisfaction with the current non-performing loan coverage ratio and is willing to gradually release provisions to support profits as income stabilizes.