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China Merchants Bank (CIHKY)
OTHER OTC:CIHKY
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China Merchants Bank
(OTC:CIHKY)
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Rating:73Outperform
Price Target:
$35.00
â–²(5.55% Upside)
China Merchants Bank's strong financial performance and attractive valuation are key strengths, supported by robust profitability and cash flow generation. However, technical indicators suggest caution due to potential overbought conditions, and the earnings call highlighted challenges in revenue growth and net interest margin.
China Merchants Bank (CIHKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$154.61B
Dividend Yield4.26%
Average Volume (3M)2.29K
Price to Earnings (P/E)8.0
Beta (1Y)0.30
Revenue Growth-4.34%
EPS Growth2.00%
CountryUS
Employees117,201
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.08
Shares Outstanding918,180,240
10 Day Avg. Volume1,781
30 Day Avg. Volume2,292
Financial Highlights & Ratios
PEG Ratio12.22
Price to Book (P/B)0.79
Price to Sales (P/S)3.25
P/FCF Ratio2.34
Enterprise Value/Market Cap2.18
Enterprise Value/Revenue0.70
Enterprise Value/Gross Profit1.02
Enterprise Value/Ebitda1.89
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
China Merchants Bank 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 MoneyChina Merchants Bank generates revenue through multiple key streams, primarily from interest income and service fees. The majority of its income comes from interest on loans provided to individuals and businesses, which constitutes a significant portion of its net interest income. The bank also earns fees from various services such as wealth management, credit card operations, and transaction services. Additionally, it engages in investment banking activities, including underwriting and advisory services, which contribute to its revenue. The bank benefits from partnerships with various financial institutions and corporations that enable it to expand its service offerings and reach a broader customer base. Economic factors, regulatory changes, and the overall financial market landscape also influence its earnings.
China Merchants Bank Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 23, 2026
Earnings Call Sentiment Neutral
The earnings call presents a balanced view with stable core profit indicators, strong growth in wealth management and corporate loans, and stable asset quality as highlights. However, challenges remain with decreasing net operating income, pressure on NIM due to weak retail loan demand, and declining payment-related income.Q3-2025 Updates
Positive Updates
Stable Core Profit Indicators
The group's net operating income was RMB 251.28 billion, a year-on-year decrease of 0.52%, with the decrease narrowed by 1.21 percentage points compared with the first half. Net profit attributable to the bank's shareholder was RMB 113.7 billion, year-on-year increase of 0.52%, up by 0.27 percentage points compared with the first half.
Wealth Management Business Growth
The bank's wealth management business showed good growth momentum with net fee and commission income recording positive year-on-year growth for the first time in 3 years. Retail AUM was RMB 16.6 trillion, up by RMB 1.67 trillion compared with the end of last year, a growth rate of 11%. Wealth management fee and commission income was RMB 20.67 billion, up by 18%, a faster growth than the first half.
Corporate Loan Growth
Corporate loan RMB 3.15 trillion, up by 10.01% compared with last year-end, indicating strong growth in this segment.
Stable Asset Quality
The NPL ratio was 0.94%, down by 0.01 percentage points. The NPL in the property and manufacturing sectors were 4.24% and 0.45%, down by 0.5 and 0.05 percentage points, respectively.
Negative Updates
Decreasing Net Operating Income
The group's net operating income decreased by 0.52% year-on-year, though the decline narrowed compared to the first half.
Pressure on NIM
For the first 3 quarters, the NIM was 1.87%, down by 12 bps year-on-year, with a declining trend due to weak demand in the retail sector and low interest rates.
Challenges in Retail Loan Growth
Retail loan growth was only 1.43%, indicating insufficient effective credit demand, especially in the retail loan segment.
Pressure on Credit Card and Payment-Related Income
Payment-related income, especially from credit card, is under pressure with a decline in transaction value by 7.7% in the third quarter.
Company Guidance
In the recent call, China Merchants Bank provided detailed guidance on its financial performance for the first three quarters of 2025. The bank reported a net operating income of RMB 251.28 billion, a slight year-on-year decrease of 0.52%, while net profit attributable to shareholders increased by 0.52% to RMB 113.7 billion. Key financial metrics, such as return on average assets (ROAA) and return on average equity (ROAE), were reported at 1.22% and 13.96%, respectively. The bank maintained a cost-to-income ratio of 29.86% and a total capital ratio of 17.59%. Total assets increased to RMB 12.64 trillion, with total customer deposits reaching RMB 9.52 trillion. Despite a challenging environment, the bank's net interest income rose by 1.74% to RMB 160.04 billion, although the net interest margin (NIM) decreased by 12 basis points year-on-year. The wealth management business showed strong growth, with retail assets under management rising to RMB 16.6 trillion, a growth rate of 11%. The bank's asset quality remained stable, with a non-performing loan (NPL) ratio of 0.94%, supported by an allowance coverage ratio of 405.93%. Looking ahead, the bank plans to continue its transformation into an international, comprehensive, and intelligent institution, aligning with China's national development plans.China Merchants Bank Financial Statement Overview
Summary
China Merchants Bank demonstrates strong profitability and cash flow generation, with efficient operations and moderate leverage. However, the recent decline in revenue growth is a concern that needs to be addressed to sustain long-term growth.Income Statement
China Merchants Bank shows strong profitability with a high gross profit margin of 88.47% and a net profit margin of 41.09% for the TTM period. However, the revenue growth rate has been negative recently, indicating a potential concern in revenue generation. The EBIT and EBITDA margins are also robust, reflecting efficient operations despite the revenue decline.75
Positive
Balance Sheet
The bank maintains a healthy debt-to-equity ratio of 0.53, indicating moderate leverage. The return on equity is strong at 12.47%, showcasing effective utilization of equity. However, the equity ratio is not explicitly provided, which could provide further insights into the company's financial stability.70
Positive
Cash Flow
The cash flow statement reveals a significant free cash flow growth rate of 89.11% in the TTM period, indicating strong cash generation capabilities. The free cash flow to net income ratio is over 1, suggesting that the company is generating more cash than its net income, which is a positive sign for liquidity.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 480.58B | 497.85B | 497.59B | 477.40B | 450.36B | 225.61B |
| Gross Profit | 330.21B | 334.86B | 336.65B | 342.26B | 327.22B | 225.61B |
| EBITDA | 177.92B | 194.24B | 192.06B | 179.72B | 161.70B | -2.49B |
| Net Income | 148.58B | 148.39B | 146.60B | 138.01B | 119.92B | 97.34B |
Balance Sheet | ||||||
| Total Assets | 12.66T | 12.15T | 11.03T | 10.14T | 9.25T | 8.36T |
| Cash, Cash Equivalents and Short-Term Investments | 1.24T | 1.21T | 1.07T | 960.91B | 846.62B | 876.67B |
| Total Debt | 433.19B | 471.07B | 436.55B | 429.69B | 631.11B | 503.90B |
| Total Liabilities | 11.36T | 10.92T | 9.94T | 9.18T | 8.38T | 7.63T |
| Stockholders Equity | 1.29T | 1.23T | 1.08T | 945.50B | 858.75B | 723.75B |
Cash Flow | ||||||
| Free Cash Flow | 449.75B | 412.09B | 327.59B | 535.25B | 157.89B | 402.20B |
| Operating Cash Flow | 473.30B | 447.02B | 357.75B | 570.14B | 182.05B | 421.33B |
| Investing Cash Flow | -412.23B | -292.86B | -255.11B | -513.93B | -19.70B | -240.75B |
| Financing Cash Flow | -101.67B | 2.15B | -72.99B | -297.03B | 89.36B | -211.79B |
China Merchants Bank Technical Analysis
Positive
33.16
Price Trends
31.39
Positive
31.70
Positive
30.55
Positive
Market Momentum
0.50
Positive
57.68
Neutral
23.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIHKY, the sentiment is Positive. The current price of 33.16 is above the 20-day moving average (MA) of 32.74, above the 50-day MA of 31.39, and above the 200-day MA of 30.55, indicating a bullish trend. The MACD of 0.50 indicates Positive momentum. The RSI at 57.68 is Neutral, neither overbought nor oversold. The STOCH value of 23.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIHKY.
China Merchants Bank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $73.33B | 12.07 | 11.31% | 3.50% | 1.79% | 30.93% | |
75 Outperform | $74.27B | 10.94 | 11.69% | 4.23% | 2.91% | 33.77% | |
73 Outperform | $154.61B | 8.00 | 14.30% | 4.26% | -4.34% | 2.00% | |
73 Outperform | $171.46B | 22.25 | 14.17% | 3.03% | -1.78% | 0.65% | |
71 Outperform | $109.35B | 17.66 | 17.41% | 0.84% | 10.85% | 7.98% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $85.51B | 14.92 | 9.14% | 2.96% | -2.84% | 25.48% |
* Financial Sector Average
CIHKY
China Merchants Bank
33.16
11.54
53.39%
HDB
Hdfc Bank
36.38
3.27
9.87%
IBN
Icici Bank
30.56
-0.42
-1.36%
MFG
Mizuho Financial
6.70
1.75
35.35%
PNC
PNC Financial
188.52
-16.37
-7.99%
USB
US Bancorp
47.75
-3.57
-6.96%
China Merchants Bank Corporate Events
China Merchants Bank Reports Steady Asset Growth in Q3 2025
Oct 31, 2025
China Merchants Bank Co., Ltd., a leading financial institution in China, operates primarily in the banking sector, offering a wide range of financial services including retail and corporate banking, wealth management, and investment banking.
China Merchants Bank Reports Mixed 2025 Interim Results
Sep 1, 2025
China Merchants Bank Co., Ltd. is a leading Chinese financial institution headquartered in Shenzhen, providing a wide range of wholesale and retail banking services both domestically and internationally. In its latest earnings report for the first half of 2025, China Merchants Bank reported a slight decline in net operating income to RMB169.923 billion, a decrease of 1.73% compared to the previous year. Despite this, the bank’s net profit attributable to shareholders saw a modest increase of 0.25%, reaching RMB74.930 billion. The bank’s total assets grew by 4.16% to RMB12,657.151 billion, with total loans and advances to customers increasing by 3.31%. However, the bank faced challenges with narrowing net interest margins and a slight decrease in non-interest income. Looking ahead, China Merchants Bank remains focused on enhancing its service quality and efficiency, aiming to maintain stable growth and continue its transformation initiatives in line with its strategic vision.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.