Depth-Company-China Merchants Bank (600036): ROE maintains leading peer-to-peer asset quality in tandem peers

Depth * Company * China Merchants Bank (600036): ROE maintains leading asset quality among peers in tandem peers

China Merchants Bank’s 2019 net profit continued to grow rapidly, and ROE maintained the forefront of its peers.

The company has a leading retail advantage. We believe that China Merchants Bank’s prudent and prudent operating style, the continuous consolidation of its advantages in the retail sector, and the progress made in the development of fintech have translated into stronger risk defense capabilities in the downturn than its peers, and profitability can remain excellent.

Maintain BUY rating.

The main points of the support level In the fourth quarter, the income continued to improve, and the profitability of the bank remained at the forefront of the industry.

3%, compared with the first three quarters (14.

6%) was further improved, mainly due to excellent asset quality performance and tax optimization.

The company’s interest income increased at a slower rate than in the previous three quarters3.

3 up to 7.

92%, causing the previous growth rate of revenue to fall earlier in the first three quarters1.

8 means 8.


We believe that under the background of the company’s rapid expansion and growth, the sharp increase in the company’s interest rate is affected by the narrowing of interest rate differentials.

The company’s non-interest income increased by 9 in ten years.

63%, compared with the first three quarters (8.

9%) increased by 0.

Seven budgets, planned budget fee income growth continued to improve.

Under the background of the company’s excellent asset quality performance and low provisioning pressure, the company’s profits increased significantly.

At the same time, the tax shield effect of the investment varieties of 杭州桑拿 government bonds and local bonds has brought a significant positive contribution to profits, which has led to a gradual increase in net profit by 15%.


The company’s highest ROE is 16.

8%, profitability maintained the forefront of the industry.

It is expected that in the fourth quarter, the interest rate narrowed, and the decline in the NPL ratio of the down-stream companies will increase by 0 in the fourth quarter.

64%, slower than the rate of asset expansion (1.

52%, QoQ), the bond allocation is expected to increase; debt-side deposits increased by 1 quarter-on-quarter.


We think the narrowing of the company’s interest margin in the fourth quarter was affected by both the negative and the negative effects.

It is tedious to reduce the need for effective financing on the asset side, and the convergence 合肥夜网 of the bank’s risk appetite has put downward pressure on yields; while the debt side has continued to increase costs as industry competition continues.

Looking forward to 2020, with the continued downward pressure on the domestic economy and the further advancement of LPR, it is expected that the interest margin of China Merchants Bank will still be under pressure.

The non-performing rate at the end of the fourth quarter fell 3BP to 1 from the end of the third quarter.

16%, the absolute value maintained at the level allowed by the industry.

It is estimated that we maintain China Merchants Bank’s net profit growth rate of 2020/2111.

8% / 10.

A prediction of 0% corresponds to an EPS of 4.

11 yuan / 4.

52 yuan, corresponding to the current net subsidy of 2020/21 1.

48 times / 1.

31 times, maintain BUY rating.
The main risks facing ratings The economic downturn has caused asset quality to deteriorate more than expected.