Analyst Manyi Lu from DBS reiterated a Buy rating on China Merchants Bank Co (CIHHF – Research Report) and increased the price target to HK$56.50 from HK$52.20.
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Manyi Lu’s rating is based on a combination of factors that highlight the strengths and potential of China Merchants Bank Co. The bank’s financial performance in FY24 was in line with expectations, showing a modest increase in net profit. Despite a slight decline in net interest margin, the results were better than anticipated, indicating resilience in the bank’s core operations.
Furthermore, China Merchants Bank’s strong position in the wealth management sector is a significant advantage. The bank’s retail assets under management saw a notable increase, and the outlook for fee income growth is positive, driven by a more active capital market in China. Additionally, the bank is expected to benefit from supportive economic policies and a recovering retail credit demand, which should contribute to earnings growth in the medium term. These factors, combined with a favorable valuation outlook, underpin Manyi Lu’s Buy rating for the stock.
Lu covers the Financial sector, focusing on stocks such as HSBC Holdings, Agricultural Bank of China, and Bank of Communications Co. According to TipRanks, Lu has an average return of 28.8% and a 92.06% success rate on recommended stocks.