China Merchants Bank (600036): Construction of fintech banks with outstanding asset quality continues to advance

China Merchants Bank (600036): Construction of fintech banks with outstanding asset quality continues to advance

The 1H19 results were in line with our expectations that China Merchants 杭州夜网 Bank’s 1H19 operating income was 1383 trillion, with a long-term growth of 9.

6%; net profit attributable to mothers is 5.06 million yuan, a year-on-year increase of 13.

1%, including 2Q single quarter revenue growth of 10 in ten years.

5%, the net profit attributable to mothers increased by 14 in ten years.

9%, in line with expectations, continued outstanding performance.

China Merchants Bank held a conference call on the 26th of the year to discuss leaders’ views on future business.

Both the bad development trend and the average interest-based loans have both fallen, and the asset quality is excellent.

At the end of 2Q, China Merchants Bank’s non-performing rate dropped significantly further by 12bps to 1.

23%, 10 consecutive quarters of decline since 2016 (bad repeat at the end of 2016 1.

87%), and the negative balance decreased by 4 from the previous quarter.


After adding back write-offs and transferring them out, the 2Q bad net generation rate increased / decreased by 17 / 29bp to 0.

60%, nuclear sales continued to grow, and the first half of the written off transfers increased by 53.

7% to 1.61 million yuan.

Concerned loans accounted for a decrease of 21bp month-on-month to 1.

30%, the balance dropped by 5 from the previous quarter.

09%, the proportion of overdue loans decreased by 2bp to 1 from the previous quarter.


Provision coverage increased by 30 from the previous month.

9ppt to 394.


The average daily net interest margin in the second quarter of 19 was 2.

69%, a year-on-year increase of 16bp, a month-on-month decrease of 3bp; the growth rate of asset scale accelerated, and net interest income increased by 13 in 1H19.

5%, 2Q single quarter growth of 12 half a year.


1) The yield of interest-earning assets in 2Q19 decreased by 2bp from the previous month, and the loan yield decreased by 8bp to 5 from the previous quarter.

27%, the return on investment fell 6bp to 3 from the previous quarter.

66%, in line with expectations under the current macro loose monetary environment.

2) In 2Q19, the cost rate of interest-bearing debt decreased by 1bp month-on-month, and the deposit cost rate increased by 4bp to 1 month-on-month.

55%, the cost of interbank debt and the previous cumulative cost fell.

We observed that the growth rate of China Merchants Bank’s time deposits accelerated in the first half of the year, with total assets / loans / deposits growing earlier in the 2Q period.

6% / 9.

9% / 6.

8%, corporate and retail time deposits among deposits increased earlier.

8% and 17.


3) Total assets / loans / deposits increased by 10 at the end of 2Q19.
0% / 11.
5% / 11.

0%, the growth rate is 4Q17 so far.

1H19 net fee income increased by 4 per year.

0%, of which 2Q increased by 6 in the first half of the year.


The increase in fee income in the first half came mainly from bank cards (+18.

A year-on-year increase of 8%, mainly due to POS transaction income) and settlement and clearing business (+22.

Year-on-year growth of 7%, mainly due to electronic payment revenue).

The construction of fintech banks continued to advance.

1H19 Information technology investment 36.

33 ppm, a 63-year increase of 63.

9%, accounting for 2 of the revenue.


Retail revenue / profit ratio increased by 深圳桑拿网 the end of 20184.

61ppt / 5.

40ppt to 54.

48% / 59.

84%, retail AUM increased by 6.

71% to 7.

3 trillion, the monthly activity of the two major APPs increased by 5% from the end of the previous year to 85.11 million households.

Profit forecast and estimation CMB A / H is currently trading at 1.


5x 2019e P / B.

Although the macro pressure has increased, taking into account the excellent asset quality and continuous improvement of fintech, maintaining the profit forecast and A / H share target price unchanged, both correspond to 2.

0x 2019e P / B, corresponding to 25/36% growth space, maintain Outperform rating.

The risk spread narrowed more than expected.