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China Merchants Bank Co Ltd Class H (CIHHF)
OTHER OTC:CIHHF
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Positive Factors
Deposit Growth
Deposit growth accelerated to 11.5% year-on-year, exceeding the bank's guidance and showing strong performance in demand deposit growth.
Loan Growth
Loan growth regained momentum, driven by both the corporate and retail segments, indicating a recovery in retail loan demand.
Wealth Management
The company benefits from a leading position in the wealth management business, with retail assets under management increasing by 12% year-on-year.
Negative Factors
Asset Quality
Asset quality is mixed as retail asset quality continues to be under pressure, affecting overall performance.
Revenue Performance
Fee income sluggishness persists, impacting the bank's overall revenue performance.
Valuation
Valuation and dividend yield remain relatively unappealing, leading to a downgrade to HOLD.
China Merchants Bank Co (CIHHF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$157.07B
Dividend Yield4.31%
Average Volume (3M)33.00
Price to Earnings (P/E)8.2
Beta (1Y)0.59
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees117,201
SectorFinancial
Sector Strength82
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.21
Shares Outstanding4,590,901,400
10 Day Avg. Volume0
30 Day Avg. Volume33
Financial Highlights & Ratios
PEG Ratio-13.67
Price to Book (P/B)0.82
Price to Sales (P/S)0.00
P/FCF Ratio1.98
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.57Price Target Upside2.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
China Merchants Bank Co Business Overview & Revenue Model
Company DescriptionChina Merchants Bank Co., Ltd., together with its subsidiaries, provides various banking products and services. It operates through Wholesale Finance Business, Retail Finance Business, and Other Business segments. The company offers current, demand, time, call, savings, notice, and renminbi accounts. Its loan products include personal commercial real estate, consumption, housing, and car loans; loans to finance for studying abroad; micro-business loans; mortgage loans for equipment; joint guarantee, special guarantee, and housing mortgage loan; bank acceptance, discount, liquid capital, and fixed asset loans; and loans for vessels. The company also offers credit cards; insurance products; open-ended funds; discount and guarantees for commercial bills, redemption of commercial bills, and guaranteed discount for commercial acceptance bills; and financial consultation, debt financing underwriting, merger and acquisition financing, and equity financing and enterprise listing services. In addition, it provides forfeiting and risk participation, escrow, cross-border RMB clearing, and interbank services; and risk and financial management, cross-border RMB and oversea financing, international factoring and settlement, and trade finance services. Further, the company offers financial leasing and guarantee, investment and wealth management, forex option and gold trading, forex express trading, international, offshore and private banking, custody, pension, and electronic banking services. As of December 31, 2021, it operated 143 branches; 1,770 sub-branches; one branch-level operation center; 2,812 self-service centers; 6,592 self-service machines; one representative office; 14,746 visual counters in Mainland China. The company also operates in Hong Kong, New York, London, Singapore, Luxembourg, Sydney, and Taipei. China Merchants Bank Co., Ltd. was founded in 1987 and is headquartered in Shenzhen, China.
How the Company Makes Money
China Merchants Bank Co Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q4-2024)
| % Change Since: 11.27%|
Next Earnings Date:Aug 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautiously optimistic outlook, with significant achievements in asset growth, retail finance, and technology integration. However, challenges persist in maintaining interest margins and improving asset quality amid a competitive market environment.Q4-2024 Updates
Positive Updates
Steady Growth Amid Challenges
The bank achieved a net profit attributable to shareholders of RMB 1.39 billion, marking a year-on-year increase of 1.22%, despite a slight decline in net operating income.
Asset Scale Expansion
Total assets exceeded RMB 12 trillion, increasing by 10.19%. Total customer deposits surpassed RMB 9 trillion, up by 11.54%.
Strong Retail Finance Performance
Net operating income and profit before tax from retail finance accounted for 58.37% and 50.74%, respectively, with retail customer numbers exceeding 200 million, a 6.6% increase.
Tech Investment and AI Integration
The bank invested RMB 13.35 billion in technology, representing 4.38% of net operating income, and has over 120 AI application scenarios.
Sustainable Practices in Finance
Released the first climate change mitigation theme Green bond among Chinese banks, with MSCI ESG rating upgraded to AAA level.
Negative Updates
Interest Margin and Income Decline
Net interest income decreased by 1.58% year-on-year, and the net interest margin fell by 17 basis points to 1.98%.
Pressure on Asset Quality
Retail loan asset quality showed signs of stress, with increases in special mention and overdue loan ratios.
Challenges in Fee-Based Income
Net fee and commission income decreased by 14%, influenced by market fluctuations and fee cuts.
Company Guidance
During the 2024 Annual Results Presentation, China Merchants Bank (CMB) announced key financial metrics reflecting a stable performance despite external challenges. The bank reported a net operating income of RMB 337.12 billion, a year-on-year decrease of 0.58%, and a net profit attributable to shareholders of RMB 1.39 billion, a 1.22% increase. The return on average assets (ROAA) stood at 1.28%, while the return on average equity (ROAE) was 14.49%, though both experienced slight decreases. Total assets exceeded RMB 12 trillion, marking a 10.19% increase, with customer deposits surpassing RMB 9 trillion, up by 11.54%. The cost-to-income ratio improved to 31.92%, indicating effective cost management. Non-performing loan (NPL) ratio remained stable at 0.95%, demonstrating strong risk compensation capability with an allowance coverage ratio of 411.98%. The bank's emphasis on digital transformation and ESG initiatives contributed to its robust financial health and strategic focus for 2025.China Merchants Bank Co Financial Statement Overview
Summary
China Merchants Bank is in robust financial health, with solid profitability, a strong balance sheet free of debt, and efficient cash flow management. Continued revenue growth and sound financial strategies place it favorably within the regional banking sector. However, vigilance is needed to maintain cash flow growth for long-term stability.Income Statement
China Merchants Bank has shown solid growth with a steady revenue increase from 2023 to 2024. The gross profit margin remains high due to the bank's nature, with a net profit margin also showing strength. While there is a lack of EBIT and EBITDA data for the latest year, the net income has grown, indicating efficient cost management.85
Very Positive
Balance Sheet
The bank exhibits a strong balance sheet with zero total debt in 2024, indicating excellent financial health. The equity has also grown, reflecting positive shareholder value. The equity ratio is favorable, showing a stable balance between assets and equity, which minimizes risk.88
Very Positive
Cash Flow
The operating cash flow has increased significantly, boosting the free cash flow. The bank demonstrates strong cash generation capabilities, which supports its operational stability. The free cash flow to net income ratio is healthy, although a decrease in free cash flow growth signals a need for caution in future cash management.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 330.64B | 334.86B | 297.80B | 342.26B | 327.22B | 287.60B | Gross Profit |
| 330.64B | 334.86B | 336.65B | 342.26B | 327.22B | 287.60B | EBIT |
| 201.89B | 217.21B | 266.26B | 298.98B | 147.26B | 121.82B | EBITDA |
| 43.96B | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 147.60B | 148.39B | 146.60B | 138.01B | 119.92B | 97.34B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.16T | 1.21T | 1.07T | 960.91B | 846.62B | 876.67B | Total Assets |
| 12.53T | 12.15T | 11.03T | 10.14T | 9.25T | 8.36T | Total Debt |
| 0.00 | 0.00 | 436.55B | 429.69B | 631.11B | 503.90B | Net Debt |
| -1.16T | -1.21T | -1.07T | -531.22B | -215.51B | -372.77B | Total Liabilities |
| 11.28T | 10.92T | 9.94T | 429.69B | 631.11B | 503.90B | Stockholders Equity |
| 1.25T | 1.23T | 1.08T | 945.50B | 858.75B | 723.75B |
| Cash Flow | Free Cash Flow | ||||
| 516.20B | 412.09B | 327.59B | 535.25B | 157.89B | 402.20B | Operating Cash Flow |
| 543.26B | 447.02B | 357.75B | 570.14B | 182.05B | 421.33B | Investing Cash Flow |
| -493.91B | -292.86B | -255.11B | -513.93B | -19.70B | -240.75B | Financing Cash Flow |
| -176.46B | 2.15B | 546.71B | -297.03B | 89.36B | -211.79B |
China Merchants Bank Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| $157.07B | 8.15 | 14.86% | 4.31% | ― | ― | ||
64 Neutral | $12.87B | 9.81 | 7.76% | 16985.65% | 12.28% | -7.83% | |
| $46.08B | 9.40 | 11.58% | 5.04% | ― | ― | ||
| $31.83B | 5.48 | 7.87% | 8.14% | ― | ― | ||
| $26.50B | 4.61 | 5.54% | 10.55% | ― | ― | ||
| $61.38B | 5.45 | 7.71% | ― | ― | |||
77 Outperform | HK$556.66B | 5.47 | 10.41% | 5.52% | -1.43% | 5.12% |
* Financial Sector Average
Performance Comparison
CIHHF
China Merchants Bank Co
6.42
2.12
49.30%
BNKHF
BOC Hong Kong (Holdings)
4.36
1.42
48.30%
CEBCF
China Everbright Bank Co
0.47
0.17
56.67%
CGMBF
China Minsheng Banking
0.46
0.07
17.95%
CHBJF
China CITIC Bank
0.92
0.36
64.29%
HK:1658
Postal Savings Bank of China Co., Ltd. Class H
5.11
1.16
29.37%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.