UOB Kay Hian analyst Kenny Lim downgraded the rating on China Merchants Bank Co (CIHHF – Research Report) to a Hold on March 28, setting a price target of HK$49.00.
Kenny Lim has given his Hold rating due to a combination of factors influencing China Merchants Bank Co’s current standing. While the bank has shown a modest increase in net profit and improved net interest margins, these positive developments are tempered by ongoing challenges such as sluggish fee income and mixed asset quality. The retail asset quality, in particular, remains under pressure, which raises concerns about the bank’s overall financial health.
Kenny Lim’s decision to rate the stock as Hold also stems from the bank’s current valuation and dividend yield, which he considers to be relatively unappealing. With no significant catalysts on the horizon to drive the stock price higher, the recommendation reflects a cautious stance. The target price set at HK$49.00 further underscores the view that, despite improving fundamentals, the stock does not present a compelling investment opportunity at this time.