China Merchants Bank 3968

Re: China Merchants Bank 3968

Postby winston » Fri May 29, 2015 6:38 am

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CMB toasts WEALTH inroads

China Merchants Bank (3968) said its private banking BUSINESS is continuing to grow as it keeps an eye out for overseas acquisitions.

WANGJing, general manager of private banking, said CMB's private banking assets are now worth over 700 billion yuan (HK$875.21 billion).

Between January and last month, the bank signed up 3,000 to 4,000 new customers, each of whom is worth between 10 million and 22 million yuan.

As a result, CMB is the largest private bank in the mainland with a 10 percent market share.

"We expect PROFIT at our private banking business in the next three years to grow by 30 percent every year," said Wang.

The consulting firm Bain & Company released the China Private Wealth Report, 2015. The report surveyed 2,800 high-net-worth individuals, each with assets of at least 10 million yuan. It found that this group of people exceeded one million last year.

Jennifer Zeng, a partner at Bain, said the total assets of China's HNWI reached 32 trillion yuan, about 15 to 20 percent of which are outside the mainland. "They are expected to make more overseas INVESTMENTS," Zeng said.

Source: The Standard HK
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Re: China Merchants Bank 3968

Postby winston » Wed Aug 26, 2015 10:13 am

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China Merchants Bank (3968 HK)

1H15: Earnings Miss Expectations On Higher Credit Cost; Upgrade To BUY On Valuation

Although CMB’s core earnings remained strong in 1H15, on a quarterly basis, its earnings missed our estimates by 4.7% on higher credit cost as NPL ratio surged 26bp qoq to 1.50% in 2Q15.

That said, we upgrade the stock from HOLD to BUY as:
a) its growth is likely to continue outpacing peers’ in the coming years,
b) the recent RRR and interest cuts are more positive for mid-sized banks, and
c) valuation remains undemanding as the stock only trades at 0.9x 2016 book value.

Our new target price is HK$24.00.


RESULTS
• Earnings were 3.4% below consensus expectation. China Merchants Bank (CMB) reported 1H15 net profit of Rmb32.9b, up 8.3% yoy, but 3.4% and 3.0% lower than our and consensus and estimates respectively.

On a quarterly basis, earnings were up 2.0% yoy but down 7.7% qoq in 2Q15.

The lower-than-expected earnings were mainly due to higher credit costs as provisioning charges were 31.9% above our estimates. That said, 2Q15 operating profits before provisions (PPoP) were 8.4% higher than our forecast.


STOCK IMPACT

• Key positives:
a) Solid core earnings growth as PPoP grew 26.2% yoy and 4.7% qoq in 2Q15,
b) fee income growth remained robust and was up 41.7% yoy, mainly driven by agency services and trust services fees, and
c) the bank has been more risk adverse in 1H15 as a much of its loans growth was driven by discounted bills and mortgage loans.
Corporate loans were down 0.2% hoh while micro enterprise loans inched up 2.2% hoh.

• Key negatives:
a) NIM narrowed by 25bp qoq to 2.65% on faster asset repricing (-44bp qoq vs -14bp qoq of liabilities repricing),
b) NPL ratio surged 26bp qoq and annualised credit cost reached 247bp in 2Q15 (2014: 133bp), and
c) coverage ratio declined further by 20ppt qoq to 204%.

• Challenging NPL trend likely to continue in 2H15. NPL balances were up by 21.5% qoq as NPL ratio reached 1.50% (industry: 1.5%) in 1H15. The higher NPL level was mainly attributed to manufacturing, wholesale and retail and the mining sector.

Looking ahead, we expect NPLs to surge further on weakening economic growth and credit cost is likely to stay above 200bp in 2015. Note that its special mention loans (SML) ratio had already reached 2.4% at 1H15 vs 1.9% at 2H14.

Source: UOBKH
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Re: China Merchants Bank 3968

Postby winston » Thu Nov 26, 2015 11:27 am

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CM BANK: Vigorously Promotes Development of M&A Finance

Tang Zhihong, Executive Vice President of CM BANK (03968.HK), said that merger and acquisition has become one of the major means for business development.

Zhao Ju, another Executive Vice President, said that the bank vigorously promotes the development of M&A finance.

Meanwhile, it will consolidate its commercial bank unit, including the readjustment of structure of commercial banking arm.

Source: AAStocks Financial News
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Re: China Merchants Bank 3968

Postby winston » Thu Nov 26, 2015 11:28 am

Oct 30, 2015

<Research Report>Daiwa: CM BANK TP Raised to $23; Kept Buy

CM BANK (03968.HK) reported 1.2% rise in 3Q profit.

Even though credit costs rose YoY, as expected by Daiwa, PPOP delivered a strong 37% growth over the preceding year, mainly driven by a solid fee-income increase and better than expected NIM.

CM BANK is the best performing China bank under the coverage of Daiwa. The rating was reiterated at Buy and the target price was revised up to $23 from $21, which is equivalent to 1.2x PBR.

Source: AAStocks Financial News
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Re: China Merchants Bank 3968

Postby winston » Thu Nov 26, 2015 11:31 am

Oct 29, 2015

<Result Ann>CM BANK (03968.HK) 3Q Net Profit Up 1.17%

CM BANK (03968.HK) announced results for the third quarter ended 30 September 2015.

Net interest income rose 17.72% year-on-year to RMB35.055 billion.

Fee and commission income amounted to RMB13.88 billion, up 51.3% from a year earlier.

Net profit added 1.17% yearly to RMB15.524 billion. EPS was RMB0.62.

The group's net interest spread was 2.56% in the third quarter, up 8 bps on a quarterly basis.

The balance of non-performing loans totaled RMB43.397 billion, representing an increase of RMB15.48 billion as compared with the beginning of the year.

Source: AAStocks Financial News
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Re: China Merchants Bank 3968

Postby winston » Fri Nov 27, 2015 9:08 am

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G Sachs Downgrades CM BANK (03968.HK) to Sell

Goldman Sachs, in its report, downgraded H Shares of CM BANK (03968.HK) 0.000 (0.000%) Short selling $463.51M; Ratio 36.005% from Buy to Sell and A Shares (600036.SH) from Conviction Buy to Neutral, on the ground that the upsurge momentum was unsustainable.

It said although the current valuation of the bank's A and H Shares were 47% and 15% premium over that of peers, the return on equity should not be able to bolster the premium.

The bank lowered its net profit forecast for 2015, 2016 and 2017 of CM BANK by 6%, 10% and 11% respectively, mainly due to an increase in credit cost and bad loan ratio.

It also lowered the target price of H Shares by 3% to $20.6, implying 2016E P/B 1.08x.

Source: AAStocks Financial News
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Re: China Merchants Bank 3968

Postby winston » Fri Apr 01, 2016 7:38 am

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China Merchants Bank (3968) posted a 3.2 percent increase in 2015 net profit to 57.7 billion yuan.

Net operating income jumped 21.5 percent to 202.3 billion yuan. But it was eroded by 59.27 billion yuan in impairment losses.

Executive vice president Wang Liang said a team has been set up to study the prospect of converting debt into equity to reduce its bad-loans ratio.

The lender proposed a final dividend of 69 fen and said the dividend payout ratio would be no less than 30 percent.

Source: The Standard
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Re: China Merchants Bank 3968

Postby winston » Thu Sep 22, 2016 9:16 am

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While CMB 1H16 earnings were in line with expectations, we are encouraged by the better asset quality due to:
a) improvement in net NPL formation ratio,
b) decline in SML ratio and overdue loans, and
c) 5.9ppt expansion in coverage ratio.

NIM is also likely to bottom in 2H16 as most loans should have been re-priced in 1H16.

Looking ahead, the bank may see sharper earnings rebound if NPL formation stabilises in 2017 due to high base effect.

Upgrade to BUY with a new target price of HK$20.75 from HK$17.85.

english.cmbchina.com/

Source: UOBKH
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Re: China Merchants Bank 3968

Postby winston » Thu Sep 22, 2016 11:19 am

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China Merchants Bank: Why BNP Paribas Sees 80% Upside


By Shuli Ren

China Merchants Bank (3968.Hong Kong) has risen only 6.9% this year, underperforming Chinese banks such as China Construction Bank (939.Hong Kong) because its dividend yield is not as generous and it is perceived to be less safe.

China Merchants Bank, or CMB, offers 4.2% dividend yield and trades at around 1 time forward book. By comparison, China Construction Bank, which has advanced 14.3% this year, generates a handsome 5.4% dividend yield on 0.8 times book.

BNP Paribas started its coverage of CMB today, with a super bullish view. Its price target of 35 Hong Kong dollars implies another 80% upside.

In his report, analyst Victor Wang did not talk about dividend yields, but rather focused on improving earnings growth at CMB. “We think high earnings power, NIM stabilization and credit cost decline will drive strong profit growth of 6%, 30% and 23% in 2016-18. Our EPS forecasts are 2%, 23% and 39% above the Bloomberg consensus,” wrote Wang.

BNP sees CMB as a retail banking play. It lifted its retail banking profit contribution from 13% a decade ago to 46% in 2015. “We see CMB as a well-positioned Chinese bank that can deliver high and sustainable risk-adjusted returns with relatively low asset quality cyclicality,” wrote Wang.

One issue with CMB is its high credit cost, because the bank has been building a cushion against rising non-performing loans. However, as China’s macro economy stabilizes and since CMB has large exposure to the safer retail segment, BNP reckons its credit cost will peak this year, to 2.33%, and fall back to 1.96% and 1.77% in 2017 and 2018.

In the last two years, CMB’s credit costs ran at 1.33% and 2.15%, well above 10-year industry average of 0.67%. BNP estimates every 10 basis points lower credit cost can lift their 2017 profit forecast by 2.9%.

In 2015, CMB’s profit margin was 2.61%, a 10-year high. BNP expects its margin to grow further as credit cost declines.

The HK$35 price target implies 1.89 times the bank’s 2016 book estimate, on the back of 14% long-term return-on-equity. In 2015, CMB’s return on equity came in at 17.1%.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... 80-upside/
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Re: China Merchants Bank 3968

Postby winston » Fri Sep 23, 2016 2:12 pm

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<Research Report>JPM Lifts CM BANK (03968.HK) Target to $25; Rated Overweight

JPMorgan, in its report, revised up the 2016-18 profit forecast of CM BANK (03968.HK) by 2.5%, 2.5% and 3% to factor in 1H16 performance.

Target price was lifted to $25 from $23 with rating kept Overweight.

The research house also pointed out the the bank's retail branches provide quality services, making its retail deposit business to outperform peers.

Source: AAStocks Financial News
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