Yesterday I made a small incremental purchase of shares in China Construction Bank (HK:939). With the mainland economy continuing to grow at a robust rate and the range of financial products and services continuing to expand and to reach a greater percentage of China's emerging wealthy and middle classes, my expectation is that earnings will continue to grow over time. Based on trailing and projected ratios (PE, PB, NIM etc) it appears cheap. The biggest issues facing the bank are concern over exposure to local government borrowers (and, to a lesser extent, property developers) and the possibility of further tightening measures in the PRC's war against inflation. These issues have received massive amounts of publicity and, I hope, are well reflected in the price. The BOA stock overhang is also weighing on the share price. While cheap could become cheaper, I am willing to make a small addition to my position.
I paid HK$6.06 per share. Average cost is now $6.41 (reflecting transaction costs but ignoring dividends).