China Merchants Bank 3968

[winston]

not vested

China Merchants Bank (3968 HK)
1H23: Reduced Provisions Cushion NIM Pressure And Weakening Fee Income

CMB’s 1H23 earnings came in above our expectations, underpinned by lower provisions.

Net interest income recorded a margin growth of 1.2% yoy as larger loan scale offset the NIM compression impact.

Non-interest income remains a key drag on operating income due to the sluggish performance in wealth management income.

Asset quality remains largely stable with the property risk exposure reaching its peak.

Maintain BUY on CMB with a lower target price of HK$50.00.

Source: UOBKH

https://research.uobkayhian.com/content ... c1be05bf6c

[winston]

not vested

CM BANK (03968.HK) 1-3Q23 NP RMB113.89B, Up 6.5% YoY

CM BANK (03968.HK) recorded a net profit of RMB113.89 billion for 1Q23 to 3Q23, up 6.52% YoY.

EPS was RMB4.44.

Net operating income amounted to RMB260.231 billion, down 1.74% YoY.

Dividend History
Announce Date Event Particular
2023/08/25 Interim No Dividend
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

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

HSBC Global Research Cuts CM BANK (03968.HK) TP to $46, with Lower Earning Forecast

HSBC Global Research cut the H-share target price on CM BANK (03968.HK) from $57.2 to $46, with the rating maintained at Buy.

The 3Q23 NIM of CM BANK ebbed by 5 bps on a QoQ basis, which was less than its peers.

The net interest income slid 0.6% QoQ.

Yet, dragged down by the wealth-related income, the fee income in the first three quarters tumbled 11.5% YoY.

The broker highlighted that the punitive regulative directives, particularly on bancassurance, may inflict a greater impact on the fee income of CM BANK in 2024 than on its peers.

Also, the NIM pressure may persist until at least the first half of 2024.

The broker further slashed the 2023-25 earnings estimates, which were already below market consensus, by 2.3%/ 11.5%/ 11.8%.

Related News - Nomura Chops CM BANK (03968.HK) TP to $45.13; 3Q Earning Miss on Lower Non-interest income

Source: AAStocks Financial News

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

[winston]

vested

Nomura Chops CM BANK (03968.HK) TP to $45.13; 3Q Earning Miss on Lower Non-interest income

Nomura reduced the target price on CM BANK (03968.HK) from $47.1 to $45.13, with the investment rating kept at Buy.

The report highlighted that the 3Q23 earnings of CM BANK fell short of expectations due to the lower non-interest income.

The quarterly net profit rose merely 2% YoY to RMB38 billion, missing Nomura's estimate by 5%.

The 3Q23 net interest income of the bank eroded 2% YoY to RMB53 billion as expected, primarily due to the NIM compression.

The NIM dropped 5 bps and 24 bps on a QoQ and YoY basis, respectively, over the quarter, hampered by the reduction of loan prime rate (LPR) and subdued credit demand.

The non-interest income slid 10% YoY to RMB28 billion.

Source: AAStocks Financial News

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

[winston]

vested

FY23F to be another year of falling ROE

With 3Q23’s net profit growth yoy of 2.7% bringing 9M23’s net profit growth yoy down to 7% (1H23: 9.4%), we think that ROE is likely to fall in FY23F.

ROE had only previously fallen once (in FY20) since the start of FY17, with FY20 and FY23F both being years of economic pressure, in our view.

If provisioning coverage ratio was cut by another 8% in 3Q23, we estimate net profit could have risen 12.1% yoy and led to higher ROE in 3Q23.

Reiterate Add. Our TP remains at HK$57.30.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 6DF728B4BA

[winston]

vested

CLSA Cuts CM BANK (03968.HK) TP to $44.33, Rating Buy

CLSA said in a report that the 2.9% uptick in the 3Q23 net profit of CM BANK (03968.HK) fell short of expectations.

The revenue of the bank plunged 5% YoY over the quarter, due to NIM compression and decline in fee income.

The asset quality, capital and liquidity, meanwhile, remained solid.

Amid the recuperation of market sentiment, CLSA forecast CM BANK to become a prime beneficiary of fiscal stimulus and LGFV debt resolution scheme.

The H-share target price on the stock was slashed from $54 to $44.33, with its rating maintained at Buy.

Source: AAStocks Financial News

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

[winston]

vested

CMB: Interest Spread Still Has Downside; Continued ST Financial Pressure Expected

Peng Jiawen, CM BANK (03968.HK)'s Proposed Vice President, said at the 3Q23 results briefing that, as the trend of narrowing interest spread will continue, and the capital market is still depressed, coupling with the impact of the relevant fee reduction policy on the income side of the bank, he believed that CM BANK will still be pressured at the financial level in the short term.

However, in the long term, Peng is confident that CM BANK will be able to maintain a stable and steady development trend in the long run.

Related News: Nomura Chops CM BANK (03968.HK) TP to $45.13; 3Q Earning Miss on Lower Non-interest income

Source: AAStocks Financial News

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

[winston]

not vested

Well placed for a better consumption outlook

A series of policy measures has eased investors’ concerns over macroeconomic uncertainties and property-related exposures, in our view.

We see this reducing downside risks relating to asset quality, which we believe could therefore be positive for bank valuations.

We cut our FY24-26F EPS by 3.9-11.2%, primarily to factor in greater pre-provisioning operating profit (PPOP) pressure over FY24F-26F.

Reiterate Add, with a higher TP of HK$57.80, driven by reduced concerns over its asset quality & capital raising, partly offset by lower sustainable ROE.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 2C7997ADCA

[winston]

not vested

China Merchants Bank (3968 HK) 3Q24: Inflection Point Is In Sight

CMB’s net profit growth turned positive in 3Q24 at +0.8% yoy, driven by resilient trading income and stringent cost control.

Management has turned more optimistic on the company’s earnings outlook after observing multiple positive operating trends following the stimulus package in late-Sep 24.

Given a turnaround in profit growth and an ample capital buffer, CMB will consider investor feedback to increase dividend payout or even conduct a share repurchase in future.

Maintain BUY. Target price: HK$49.00.

Source: UOBKH

https://39646150.fs1.hubspotusercontent ... (3968%20HK)%20241104.pdf?utm_medium=email&_hsenc=p2ANqtz-9T9de4MBS1mcTP2zNG2dUSLy5ji4NDU65gAjVjIZFEpNQzIYUG0Ay1NIeiFtU1Rfq7DE9nF-rDQPh9Q2xMlc55szrNUQ&_hsmi=332160599&utm_content=332160599&utm_source=hs_email

[winston]

vested

<Earnings First Take> CMB (3968 hk) FY24 results in line; interim dividend for the first time

FY24 NIM dropped by 17bps to 1.98%. 4Q NIM dropped by 3bps q/q to 1.94%, supported by the dropping funding costs. The NIM declining trend has been narrowing down.

Fee income dropped by 14.3% y-o-y to Rmb 72.1bn. Total non-NII, however, increased by 1.15% y/y to Rmb 125.8bn driven by the increase in investment gains and fair value change.

The trend is in line with 9M24 and expectations.

Asset quality indicators showing mixed trend, with NPL ratio declining in China property sector but increasing in retail loan, while NPL new formation ratio was also higher

Dividend payout ratio slightly increased by 0.3ppt to 35.3% and plans for interim dividend for FY25F for the first time.

We view the results as positive in general. Currently have BUY with TP at HKD 52.2

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=24434