China Merchants Bank 3968

[winston]

Ratings, TPs on CM BANK (03968.HK) (Table)

Brokers│Ratings│TPs (HKD)

CICC│Outperform│90.59
Nomura│Buy│82.26
JPMorgan│Overweight│81
Morgan Stanley│Overweight│80.3
Daiwa│Buy│80
Goldman Sachs│Buy│78.82
Credit Suisse│Outperform│78
CGS-CIMB│Overweight│75.5
CCBI│Outperform│74
BOCI│Buy│71
UOB Kay Hian│Buy│71
Citigroup│Buy│70
BNP Paribas│Hold│68
Jefferies│Hold│62.72
HSBC Global Research│Hold│58
Macquarie│Underperform│45

Source: AAStocks Financial News

[winston]

Brokers See CMB Interim NP to Jump Over 16%, Focus on Wealth Mgmt Value Cycle Chain

CM BANK (03968.HK) is set to announce its interim results for the six months ended 30 June 2021 this Friday (13th).

According to brokers' forecasts as compiled by our reporters, CM BANK's net profit for the period is predicted to range between RMB57.605 billion to RMB58.783 billion, up 15.7-18.1% YoY.

The median is RMB58.16 billion, an increase of 16.8% year-on-year.

CICC expressed that given the lower credit cost, the market broadly expect the Chinese banks to have better results.

The broker recommended investors to focus on the performance of the value cycle chain of CM BANK's wealth management business, which could act as a sustainable source for satisfactory results in mid to long-term.

Brokers│2021 Interim NP (RMB)│YoY change
BofA Securities│58.783 billion│+18.1%
CCB International │58.1 billion│+16.7%
CICC│57.605 billion│+15.7%

Based on CM BANK's 2020 interim net profit of RMB49.788 billion.

Source: AAStocks Financial News

[winston]

not vested

Brokers' Post-result Ratings, TPs, Views on CM BANK (03968.HK) (Table)

Brokers│Ratings│TPs (HKD)
CICC│Outperform│90.59
Nomura│Buy│82.26->82.45
JPMorgan│Overweight│81
Morgan Stanley│Overweight│80.3
Goldman Sachs│Buy│78.82
Credit Suisse│Outperform│78
CCBI│Outperform│65.45->74
UBS│Buy│73.9
Citigroup│Buy│70
HSBC Global Research│Hold│58
BofA Securities│Underperform│35.4->40

Brokers│Viewpoints
CICC│result slightly beats; focuses on 3.0 model evolution
Nomura│interim earnings beat on fee income growth
JPMorgan│several 2Q result metrics beat
Morgan Stanley│2Q earnings, PPOP growth robust
Goldman Sachs│fee income beats
Credit Suisse│interim result robust; asset quality improves further
CCBI│earnings quality solid amid headwind
UBS│all biz metrics beat
Citigroup│PPOP, PBT rise on NII growth but NIM disappointing
HSBC Global Research│AUM growth solid; NIM weaker than expected
BofA Securities│interim result robust but valuation expensive

CM BANK Interim NP +22.8% to RMB61.15B, Beating

Source: AAStocks Financial News

[winston]

not vested

CM BANK(3968)

Analysis：

China Merchants Bank (3968) is transforming itself into“Light-model Bank”.

In the first half of 2021, the Group realized the net operating income of RMB168.830 billion, representing a year-on-year increase of 13.95%;

Realized a net profit attributable to shareholders of the Bank of RMB61.150 billion, representing a year-on-year increase of 22.82%;

Realized the net interest income of RMB99.341 billion, representing a year-on-year increase of 9.32%; and

Realized the net non-interest income of RMB69.408 billion, representing a year-on-year increase of 20.75%, accounting for 41% of its net operating income.

The return on average asset (ROAA) attributable to shareholders of the Bank and return on average equity (ROAE) attributable to ordinary shareholders of the Bank were 1.42% and 18.06%, up by 0.13 percentage point and 1.12 percentage points year-on-year, respectively. (I do not hold the above stock)

Strategy：
Buy-in Price: $63.50, Target Price: $70.50, Cut Loss Price: $59.50

Source: Phillips

[winston]

not vested

China Merchants Bank (3968 HK/600036 CH): As good as it stands [BUY, TP HK$87.70/BUY, TP RMB81.50]

Strong 2Q21 earnings of +32.5% y-o-y, in line with our/consensus estimates, thanks to a low base effect and strong income across the board

Concerns on lowering fee rate for mutual fund’s subscription, property and LGFV risks are overdone

See NIM pressure in 2H21 given its focus on keeping asset quality

Raised TP to HK$87.7 by rolling over to FY22F valuation; Reiterate BUY

Source: DBS

[winston]

not vested

China Merchants Bank (3968 HK / 600036 CH) - Robust fee income and strong retail franchise

China Merchant Bank (CMB) reported better-than-expected 2Q21 results with net profit & pre-provision operating profit (PPOP) rose 33% and 19% y/y respectively, driven by strong fee income growth, trading gain, solid loan growth, better cost control and lower credit cost.

However, net interest margin (NIM) dropped 6bps q/q to 2.5%.

Return-on-equity (ROE) increased 2.8ppt y/y to 17.4%.

CMB maintains its guidance of a slight y/y NIM contraction for FY21e, and will target to keep full-year NIM above 4Q20’s level.

Solid asset quality with non-performing loan (NPL) ratio edged down 1bp q/q to 1.0% & NPL coverage ratio further increased 58bps q/q to 440%.

However, Common Equity Tier 1 (CET-1) ratio dropped 30bps q/q to 11.9% in 2Q21, which is likely due to dividend payment and is still one of the highest among joint-stock banks.

CMB has developed a strong retail franchise. Going into 2H21e, management will focus on asset under management (AUM) to drive growth in the long-term & has articulated strategy to drive AUM growth.

We maintain our view that CMB is the preferred pick in the sector owing to its more retail-focused strategy & a comprehensive wealth management platform which should support further re-rating.

We lift Fair Value estimate to HKD78 (3968 HK) / CNY62 (600036 CH) by rolling over to FY22e estimates while maintaining the valuation multiple at 1.9x forward Price-to-Book.

We view the valuation premium is justified to reflect its leading position in retail banking franchise. BUY.

Source: OCBC

[winston]

not vested

Brokers' Ratings, TPs, Views on CM BANK (03968.HK) Post-QoQ Result (Table)

2021/10/25

Brokers│Ratings│TPs (HK$)
CICC│Outperform│90.59
JPMorgan│Overweight│85
Goldman Sachs│Buy│80.43
Morgan Stanley│Overweight│80.3
Credit Suisse│Outperform│78
UBS│Buy│74.3
Citigroup│Buy│74.02
Jefferies│Hold│62.72
HSBC Global Research│Hold│588
BofA Securities│Underperform│40

Brokers│Views
CICC│result slightly above forecast; wealth strategy result notable
JPMorgan│rev beats, yet red flag to credit growth, asset quality
Goldman Sachs│NIM rebounds, non-loan provision as spotlight
Morgan Stanley│result solid, wealth mkt shr grows further
Credit Suisse│biz solid, stable, prominent
UBS│QoQ biz solid, driven by strong rev growth, cost efficiency
Citigroup│PPOP, NPAT robust; NIM, capital adequacy ratio as spotlight
Jefferies│biz strong all along
HSBC Global Research│biz condition solid; earnings undermined by credit loss provision
BofA Securities│wealth mgmt biz shows weakening sign

Source; AAStocks Financial News

[winston]

vested

Fitch Upgrades CM BANK (03968.HK) Credit Rating to 'A-'; Outlook Stable

Fitch Ratings upgraded CM BANK (03968.HK)'s Long-Term Foreign-Currency Issuer Default Rating (IDR) to "A-" from "BBB+", with a stable outlook.

The Support Rating (SR) has been upgraded to "1" from "2" and the Support Rating Floor (SRF) was likewise lifted to "A-" from "BBB+".

Fitch illustrated that the upgrading decision was made based on the belief that CM BANK may benefit from the support from the Chinese government.

Such opinion was attested by CM BANK's leading consumer franchise within the domestic market and the fact that the scale of retail assets under CM BANK's management is similar to that of some state-owned banks.

Source: AAStocks Financial News

[winston]

not vested

China Merchants Bank (3968 HK/600036 CH) - 4Q21 results pre-announcement suggests robust fundamentals

CMB pre-announced 4Q21 recently with net profit up 27% y/y, accelerating from around 22% in the first nine months in 2021 (9M21).

Operating income was up 21% y/y & net interest income was higher than expected & rose 15% y/y in 4Q21.

With asset growth at more or less the same rate, 4Q21 net interest margin (NIM) should be flat q/q, which was better than the expectation of a sequential compression.

Asset quality further improved with non-performing loan (NPL) ratio dropped 2bps q/q to 0.91%. NPL coverage edged down 1.8ppts q/q/ to 441.3%, but was still significantly above regulatory requirement.

CMB’s return-on-equity (ROE) was around 480bps higher than its peers as of the end of September 2021, & the superior ROE trend is likely to sustain going forward.

CMB has been a leader in retail and wealth business, providing support to its revenue growth in a rate cut environment.

The stock is trading at 1.67x P/B (which is at the lower-end of its medium-term trading range of 1.5-2.0x) with a 17.0% ROE in 2022e.

In our view, while CMB does not offer a high & attractive dividend yield (vs. its SOE peers), it is the preferred pick in the sector for long-term growth owing to its more retail-focused strategy & a comprehensive wealth management platform.

We maintain our Fair Value estimate at HKD78, which is based on 1.9x forward Price-to-Book.

We believe CMB’s valuation premium is justified given its leading position in retail banking franchise. BUY.

Source: OCBC

[winston]

not vested

CM BANK 2021 NP Up 23.2% YoY to RMB119.92B; DPS RMB1.522

CM BANK (03968.HK) announced the results for the year ended 31 December 2021.

The Group realized net operating income for the year amounting to RMB331.407 billion, a year-on-year increase of 14.17%, and net profit amounting to RMB119.922 billion, a year-on-year increase of 23.2%.

Basic earnings per share were RMB4.61.

The Company proposed to declare a cash dividend of RMB1.522 for every share.

Dividend History
Announce Date Event Particular
2021/10/22 Quarter 3 No Dividend
2021/08/13 Interim No Dividend
2021/04/23 Quarter 1 No Dividend
2021/03/19 Final D:RMB 1.2530

Source; AAStocks Financial News