China Merchants Bank 3968

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3Q Results

Net operating Income: +4% yoy
EPS: +15% yoy

https://www1.hkexnews.hk/listedco/listc ... 800737.pdf

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Oct 26, 2022

Model adjustment

We cut FY22F-24F EPS by 2.7% to 8.6%, which reflect our view of a weaker
economy in FY22F-24F.

We raise our valuation discounts relating to policy and asset quality risks, given our view that such risks could remain elevated over FY22F – 24F.

We assume a 15% ‘stressed’ corporate NPL ratio under our stress-test adjusted GGM, versus 10.5% previously.

Reiterate Add rating. TP is cut to HK$46.9, driven by these higher valuation
discounts and lower FY22F-24F EPS.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... F32D330B3C

[winston]

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China Merchants Bank (3968 HK)
3Q22: Results In Line; Resilient Earnings Despite NIM Compression

3Q22 results came in within our expectations, with net profit improving 15.5% yoy.

While NIM pressure continues to impact industry-wide earnings, we opine that CMB is
able to outperform peers with its solid retail banking business.

Maintain BUY on CMB with a lower target price of HK$41.43 as we lower our growth assumptions to factor in a later-than-expected loosening of China’s COVID-19 curbs and incorporate the weaker renminbi to Hong Kong dollar exchange rate assumptions.

Source: UOBKH

https://research.uobkayhian.com/content ... 3ce28b1183

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CM BANK (03968.HK) Slips Over 6%; 1Q Results Show Narrowed Net Interest Spread

CM BANK (03968.HK) last printed at $37.05, down 6.2%, being the worst blue chip, on volume of 22.63 million shares.

The stock, lagging behind Chinese banks and the market this morning, bottomed at $37, hitting an almost five-month low.

HSBC Global Research said CMB presented a slightly negative results, whereas JP Morgan said the bank's quarterly results missed forecast.

Related News: JPM Slightly Hikes CMB Earnings Forecast, Maintains Overweight and $70 TP

CM BANK had announced the first quarter result ended March 2023. Its operating income declined 1.7% YoY to RMB89.832 billion. Its net profit amounted to RMB38.839 billion, up 7.8%.

During the period, net interest income was RMB55.409 billion, up 1.7% YoY.

Net interest spread was 2.18% and net interest margin was 2.29%, down 21 and 22 basis points YoY respectively, and both down 8 basis points QoQ.

Net non-interest income was RMB35.216 billion, lowering by 6.2% year-over-year.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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Brokers│Views

JPMorgan│PPOP and earnings missed forecast; near-term share price underperformance expected

Nomura│Quarterly earnings missed, dragged down by weak fee income

BOC International│
results fell short of estimates

Morgan Stanley│Quarterly results hampered by decline in NIM and fee income, but anticipated to progressively improve

HSBC Global Research│Resilient profitability remained intact amid business headwinds

UBS│Quarterly earnings missed due to stronger-than-expected pressure on NIM and fee income among Chinese banks

Daiwa│Gross fee income dropped 11% YoY

BofA Securities│1Q23 results lackluster, but viewed share price weakness as buying opportunity

Haitong International│Revenue missed forecast; asset quality remained stable

Jefferies│Earnings and revenue missed; awaits consumption and market recovery

Goldman Sachs│Fee income weaker than expected; forecasts on PPOP multiples lowered

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

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July 4, 2023

JPM Trims CM BANK (03968.HK) TP to $60, Still Names It as Sector Top Pick

JPMorgan kept CM BANK (03968.HK) as its sector top pick despite the mounting near-term earnings risks due to enervated macroeconomic data in mainland China, primarily owing to the bank's status as a growth stock with high capital returns.

JPMorgan forecast that the RoCE and CET1 of CM BANK to be at 16.7% and 14.1%, respectively.

The target price on the stock was axed from $70 to $60, with its rating maintained at Overweight.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... 276526/all

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1H23 Results Preview: Expect Modest Improvement

CMB expects its loan growth to have moderated in 1H23 as its retail loan growth momentum in 2Q23 is below their expectations.

NIM compression remains but management expects the downward pressure to ease in the coming few quarters.

Fee income growth may fall below expectations but credit cost has stabilised given the resilient asset quality.

We lower our 2023 EPS estimate by 3.6% to Rmb5.92.

Maintain BUY with a lower target price of HK$53.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 68d8362811

[winston]

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Mapping the return to 2018’s buffers

We see pressure on FY23F-25F PPOP eroding CMB’s buffers of provisioning and NPL recognition back down to FY18’s levels (Fig 23).

These buffers in FY22 equated to 96% of FY22 PPOP, the fourth highest of the banks we cover (Fig 15).

As CMB’s P/Eg is a more stable valuation multiple than P/PPOPg (Fig 25), utilising these buffers can thus be critical in helping rerate CMB, in our view.

Reiterate Add rating, TP cut to HK$54.80 from HK$70.70, in part due to 2 – 6% lower FY23F-25F EPS forecasts.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 327316EB3B

[winston]

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<Blue Chip Results>CM BANK 1H23 NP Up 9.1% to RMB75.752B

CM BANK (03968.HK) announced its results for the first half of the financial year ended June 2023.

Net operating income fell 0.34% YoY to RMB178.465 billion.

Profit before tax was RMB90.884 billion, an annual increase of 8.68%.

Net profit hiked 9.1% to RMB75.752 billion.

Basic EPS was RMB2.93.

No dividend was declared.

Dividend History
Announce Date Event Particular
2023/04/26 Quarter 1 No Dividend
2023/03/24 Final D:RMB 1.7380(equivalent to HKD 1.890363)
2022/10/28 Quarter 3 No Dividend
2022/08/19 Interim No Dividend

Related News: CICC: CN LPR Cut Smaller than MLF's, which May Hedge Narrower NIM of CN Banks, and Back Real Econ

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... .1288905/2

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Brokers│Views

HSBC Global Research│Difficult time

JPMorgan│2Q23 earnings in line but core earnings trend weaker than expected

GF Securities│Rebound in business results with improved asset quality

Citigroup│2Q23 profit after tax growth in line; revenue fell short of estimates as dragged down by weak NIM and fee income
'
CITIC Securities│Resilient operations with consolidated fundamentals

CICC│Interim results in line with forecasts

Nomura│2Q23 earnings slightly missed, dragged down by sluggish fee income and NIM and lower-than-assumed revenue

CCB International│Funding cost erosion unavoidable

Daiwa│Fee income still under pressure; earnings supported by lower credit costs

UBS│Earnings after tax in line with weaker-than-expected core earnings

Haitong International│Earnings growth improved with stable asset quality

Huatai Securities│Steady improvement in business results with solid asset quality

Goldman Sachs│Earnings growth driven by reduced non-loan credit asset provisions

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN