China Merchants Bank (CIHKY) AI Stock Analysis

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China Merchants Bank

(OTC:CIHKY)

Rating:76Outperform

Price Target:―

China Merchants Bank's strong financial stability, effective cost management, and strategic focus on growth and technology investments are key strengths. The stock's attractive valuation provides upside potential, despite technical indicators suggesting short-term bearish sentiment and challenges noted in the earnings call.

China Merchants Bank (CIHKY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$159.83B

Dividend Yield7.75%

Average Volume (3M)12.35K

Price to Earnings (P/E)8.2

Beta (1Y)0.34

Revenue Growth-2.37%

EPS Growth0.51%

CountryUS

Employees117,201

SectorFinancial

Sector Strength78

IndustryBanks - Regional

Share Statistics

EPS (TTM)1.02

Shares Outstanding918,180,240

10 Day Avg. Volume0

30 Day Avg. Volume12,349

Financial Highlights & Ratios

PEG Ratio-15.10

Price to Book (P/B)0.91

Price to Sales (P/S)0.00

P/FCF Ratio2.24

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

China Merchants Bank Business Overview & Revenue Model

Company DescriptionChina Merchants Bank (CIHKY) is one of the largest commercial banks in China, headquartered in Shenzhen. Established in 1987, it operates primarily in the financial services sector, providing a comprehensive range of financial solutions including personal banking, corporate banking, treasury operations, and wealth management services. The bank is known for its innovative approach to banking, leveraging technology to enhance customer experiences and streamline operations.

How the Company Makes MoneyChina Merchants Bank generates revenue through various streams, primarily driven by interest income from its extensive portfolio of loans offered to individuals, small and medium-sized enterprises, and large corporations. In addition to interest income, the bank earns substantial fees from its wealth management services, including investment advisory and asset management. The bank also benefits from transaction service fees, such as those related to credit cards and payment processing. Significant partnerships with financial technology firms and other financial institutions facilitate its digital banking initiatives, further expanding its revenue potential. By maintaining a diversified range of financial products and services, China Merchants Bank effectively captures a broad market segment, contributing to its robust earnings.

China Merchants Bank Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q4-2024)

% Change Since: 18.70%|

Next Earnings Date:Aug 30, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a balanced perspective with stable financial performance, strategic technological investments, and ESG improvements, countered by challenges in interest margins, rising NPLs, and declining fee-based income.

Q4-2024 Updates

Positive Updates

Stable Financial Performance

Net profit attributable to shareholders increased by 1.22% to RMB 1.39 billion, with a cost-to-income ratio decrease of 1.05 percentage points to 31.92%, demonstrating effective cost management.

Asset Growth

Total assets exceeded RMB 12 trillion, an increase of 10.19%, while total customer deposits surpassed RMB 9 trillion, up by 11.54%.

Strong Retail Finance Contribution

Retail finance accounted for 58.37% of net operating income, and retail loans grew by 6%, with retail customer AUM approaching RMB 15 trillion.

Technological Advancements

Investment in technology amounted to RMB 13.35 billion, with significant advancements in AI applications across 120 scenarios.

ESG Improvements

CMB's MSCI ESG rating was upgraded to AAA, with significant increases in green loan and green leasing balances by 9% and 19% respectively.

Negative Updates

Interest Margin Decline

Net Interest Margin (NIM) decreased by 17 basis points to 1.98%, reflecting challenges in maintaining interest income amidst a competitive market.

Non-Performing Loan (NPL) Increase

NPL balance rose by RMB 4.03 billion to RMB 65.61 billion, with a slight increase in the retail NPL ratio, indicating rising pressures in asset quality.

Fee-Based Income Challenges

Net fee and commission income decreased by 14%, influenced by sluggish consumption and regulatory fee cuts, impacting overall non-interest income.

Company Guidance

In the 2024 Annual Results Presentation for China Merchants Bank, several financial metrics were highlighted to showcase the bank's performance and strategic positioning. The bank reported a net operating income of RMB 337.12 billion, which marked a year-over-year decrease of 0.58%, while net profit attributable to shareholders increased by 1.22% to RMB 1.39 billion. The return on average assets (ROAA) was 1.28%, and the return on average equity (ROAE) was 14.49%, both slightly declining year-over-year. The net interest income was RMB 211.27 billion, reflecting a year-over-year decrease of 1.58%, and the net interest margin (NIM) was 1.98%, down by 17 basis points from the previous year. Total assets surpassed RMB 12 trillion, growing by 10.19%, with customer deposits exceeding RMB 9 trillion, an increase of 11.54%. The cost-to-income ratio improved to 31.92%, and the non-performing loan (NPL) ratio remained at 0.95%. The bank's allowance coverage ratio was 411.98%, and its credit cost ratio was 0.65%. Additionally, the bank's core Tier 1 capital adequacy ratio (CAR) increased to 14.86%, supporting its robust financial position. The bank continues to focus on technology investments, with RMB 13.35 billion allocated towards IT, representing 4.38% of its net operating income, and has over 10,000 R&D personnel. These metrics collectively highlight China Merchants Bank's steady growth and strategic focus on enhancing profitability, asset quality, and technological advancement amidst a challenging economic environment.

China Merchants Bank Financial Statement Overview

Summary

China Merchants Bank exhibits a strong financial position with consistent revenue growth, solid profitability, a strong equity base, and effective cash flow management. The absence of debt enhances its financial stability.

Income Statement

Very Positive

China Merchants Bank demonstrates a strong income statement characterized by consistent revenue growth over recent years, with a notable increase in total revenue from 297.8 billion CNY in 2023 to 334.9 billion CNY in 2024. The net profit margin remains robust, highlighted by a net income of 148.4 billion CNY in 2024, indicating effective cost management. However, the lack of EBIT and EBITDA figures for 2024 limits a more comprehensive margin analysis.

Balance Sheet

Very Positive

The balance sheet of China Merchants Bank is solid, with a high equity ratio of 10.09% in 2024, supported by substantial stockholders' equity of 1,226.01 billion CNY. The absence of total debt in 2024 marks a significant improvement in financial stability compared to previous years. The bank's assets have grown consistently, reaching over 12.15 trillion CNY, indicating strong asset management and growth.

Cash Flow

Positive

China Merchants Bank's cash flow statement shows a strong operating cash flow of 447.0 billion CNY in 2024, reflecting efficient cash generation capabilities. There is a remarkable increase in free cash flow from 181.4 billion CNY in 2023 to 412.1 billion CNY in 2024, suggesting improved capital management. However, the volatile nature of financing cash flows could pose risks if not managed carefully in the future.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	334.86B	297.80B	342.26B	327.22B	287.60B
Gross Profit	334.86B	339.12B	342.26B	327.22B	287.60B
EBITDA	0.00	0.00	0.00	0.00	0.00
Net Income	148.39B	146.60B	138.01B	119.92B	97.34B
Balance Sheet
Total Assets	12.15T	11.03T	10.14T	9.25T	8.36T
Cash, Cash Equivalents and Short-Term Investments	1.21T	1.07T	960.91B	846.62B	876.67B
Total Debt	0.00	1.58T	429.69B	631.11B	503.90B
Total Liabilities	10.92T	9.94T	429.69B	631.11B	503.90B
Stockholders Equity	1.23T	953.39B	945.50B	858.75B	723.75B
Cash Flow
Free Cash Flow	412.09B	181.39B	535.25B	157.89B	402.20B
Operating Cash Flow	447.02B	211.55B	570.14B	182.05B	421.33B
Investing Cash Flow	-292.86B	-255.11B	-513.93B	-19.70B	-240.75B
Financing Cash Flow	2.15B	546.71B	-297.03B	89.36B	-211.79B

China Merchants Bank Technical Analysis

Technical Analysis Sentiment

Positive

Last Price33.07

Price Trends

50DMA

31.72

Positive

100DMA

29.98

Positive

200DMA

27.37

Positive

Market Momentum

MACD

0.23

Positive

RSI

54.83

Neutral

STOCH

37.74

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 33.07 is below the 20-day moving average (MA) of 33.29, above the 50-day MA of 31.72, and above the 200-day MA of 27.37, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 54.83 is Neutral, neither overbought nor oversold. The STOCH value of 37.74 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

Overall Rating

UnderperformOutperform

Sector (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KB	78 Outperform	$29.13B	7.78	10.66%	2.32%	-3.00%	32.85%
CIHKY	76 Outperform	$159.83B	8.16	14.17%	7.75%	-2.37%	0.51%
HDB	73 Outperform	$174.23B	23.12	13.78%	1.66%	13.13%	0.54%
SHG	71 Outperform	$24.88B	7.79	8.79%	2.46%	-3.37%	4.50%
IBN	69 Neutral	$118.23B	18.90	17.47%	0.72%	17.32%	12.99%
Sector *	67 Neutral	$16.88B	11.72	9.78%	4.17%	11.83%	-7.72%
MFG	65 Neutral	$69.58B	12.10	8.45%	2.42%	13.63%	27.77%

* Financial Sector Average

Performance Comparison

CIHKY

China Merchants Bank

33.07

12.33

59.45%

HDB

Hdfc Bank

75.28

15.11

25.11%

IBN

Icici Bank

33.21

4.06

13.93%

Kb Financial Group

81.69

20.86

34.29%

MFG

Mizuho Financial

5.56

1.16

26.36%

SHG

Shinhan Financial Group Co

49.29

9.99

25.42%

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.Date of analysis: May 01, 2025