Core Viewpoint - The report indicates that China Merchants Bank has shown improvement in profit growth and asset quality, leading to a recommendation for an "overweight" rating [1][6]. Financial Performance - In the first half of 2025, China Merchants Bank reported operating revenue of approximately 169.97 billion yuan, a year-on-year decrease of 1.72%, with the decline narrowing by 1.36 percentage points compared to the first quarter [3]. - The net profit attributable to shareholders increased by 0.25% year-on-year, marking a turnaround from previous declines [2][3]. - The bank's non-performing loan ratio stood at 0.93%, a decrease of 1 basis point from the previous quarter and 2 basis points from the end of 2024 [5]. Revenue Composition - Net interest income was 106.09 billion yuan, representing a year-on-year increase of 1.57%, accounting for 62.41% of total revenue [3]. - Non-interest income was 63.88 billion yuan, down 6.73% year-on-year, making up 37.59% of total revenue [3]. Asset Quality - The bank's provision coverage ratio was 410.93%, indicating a strong buffer against potential loan losses [5]. - The bank's asset and liability growth rates improved compared to the end of the first quarter, with total assets growing by 9.35% year-on-year [4][5]. Investment Outlook - The bank is expected to see net profit growth of 0.80%, 3.93%, and 4.42% for the years 2025 to 2027, respectively [6]. - The bank's first implementation of a mid-term dividend in 2025 is noted as a positive development [6].

Core Viewpoint - The banking sector is showing signs of recovery with improved financial metrics and a favorable investment environment, particularly for bank ETFs that track the performance of listed banks in China [4][5][6]. Group 1: Bank ETFs Performance - The Bank ETFs are designed to passively track the CSI Bank Index, which includes 42 listed banks in A-shares, with nearly 30% of the portfolio allocated to major state-owned banks like ICBC, ABC, and CCB, capturing high dividend opportunities [4]. - Approximately 70% of the portfolio focuses on high-growth joint-stock banks and city commercial banks, making it an efficient investment tool for tracking the overall banking sector [4]. - The Bank AH Preferred ETF tracks the Bank AH Index, which consists of securities listed in both A-shares and Hong Kong, employing a monthly security category conversion strategy [4]. Group 2: Financial Performance of Banks - In the first half of the year, 42 A-share listed banks achieved total operating income exceeding 2.9 trillion yuan, a year-on-year increase of over 1%, and a net profit attributable to shareholders of 1.1 trillion yuan, up 0.8% year-on-year [4]. - Major state-owned banks reported net profits exceeding 100 billion yuan each in the first half of the year, with non-performing loan ratios remaining low across the six major commercial banks [4]. Group 3: Sector Analysis and Outlook - The performance of state-owned banks has improved beyond expectations, with significant recovery in fee and other non-interest income growth compared to Q1, driving overall performance [5]. - Joint-stock banks are experiencing a rebound in revenue and profit growth due to stable asset quality and improved non-interest income [5]. - The banking sector is expected to see a rotation and rebound, with the overall performance of banks in the mid-year report indicating a recovery in ROE [5]. - The ranking of bank sub-sectors is as follows: joint-stock banks > city commercial banks = state-owned banks > rural commercial banks, with a strong outlook for joint-stock banks due to financial clearing and valuation recovery [5]. Group 4: Long-term Valuation Recovery - The long-term logic for systemic valuation recovery of bank stocks remains unchanged, with marginal improvements in the banking sector helping to boost market confidence [6]. - The easing of loan rate declines and continuous improvement in deposit costs are expected to support the stabilization of the banking sector's fundamentals [6]. - The attractiveness of bank stocks to medium- and long-term funds remains strong, with low interest rates and an "asset shortage" environment enhancing dividend yield and valuation advantages [6].

Core Viewpoint - The current capital market is experiencing a phenomenon of deposit outflow, leading to increased pressure on demand deposits growth for China Merchants Bank (CMB) [1] Financial Performance - In the first half of 2025, CMB reported operating income of 169.97 billion yuan, a year-on-year decrease of 1.72%, while net profit attributable to shareholders was 74.93 billion yuan, a slight increase of 0.25% [1] - CMB's daily earnings for the first half of 2025 averaged approximately 409 million yuan [1] - The bank's net interest income for the first half of 2025 was 106.09 billion yuan, up 1.57% year-on-year, with a net interest margin of 1.88%, down 12 basis points year-on-year [4] Deposit and Loan Trends - As of June 30, 2025, CMB's average daily balance of demand deposits was 4.38 trillion yuan, a year-on-year increase of 4.78%, accounting for 50.26% of total customer deposits [5] - The average cost of customer deposits was 1.26%, down 28 basis points from the end of the previous year [4] - Retail loans amounted to 3.61 trillion yuan, a slight increase of 0.94%, representing 53.43% of total loans, down 1.21 percentage points from the end of the previous year [7] Non-Interest Income - CMB's non-interest income for the first half of 2025 was 63.88 billion yuan, a decrease of 6.73% year-on-year, with net fee and commission income at 37.60 billion yuan, down 1.89% [6] - Wealth management fee and commission income saw a notable increase of 11.89% year-on-year, marking the first positive growth in three years [6] Retail Banking Strategy - CMB's retail banking business contributes over 55% to both revenue and profit, with a total retail customer base of 216 million, up 2.86% from the end of the previous year [7] - The bank's management emphasized a commitment to maintaining a strong retail strategy while being cautious in tactical execution amid rising risks in the retail credit sector [8][9]

Market Overview - The A-share market experienced a collective pullback on September 2, with the Shanghai Composite Index falling to 3844.84 points, down 0.79%, the Shenzhen Component Index down 2.21%, and the ChiNext Index down 2.90% [1][2]. Sector Performance - The brokerage sector saw a sudden surge in the morning, with notable gains including Pacific Securities hitting the daily limit, Guosheng Financial increasing by 5.82%, and Changcheng Securities rising over 4% [3][4]. - Financial stocks generally performed well, with major banks like China Merchants Bank rising nearly 3%, and other banks such as China Construction Bank, CITIC Bank, and Industrial and Commercial Bank of China increasing by over 1% [3][4]. Consumer Sector - Several consumer stocks rose against the market trend, with BeiGene up 9.84% and Midea Group also showing gains. Kweichow Moutai's stock price briefly returned to 1500 yuan, currently reported at 1488.07 yuan per share [4][6]. Gold and Silver Market - The gold and jewelry sector saw significant gains, with stocks like Mankalon rising by 16% and several others hitting the daily limit. Gold futures and spot prices both surpassed the $3500 mark, influenced by expectations of U.S. interest rate cuts and a weak dollar, with gold prices up over 33% year-to-date [10][12]. Declining Sectors - The photovoltaic sector faced significant declines, with CPO modules, optical communication, and digital currency-related stocks among the hardest hit, showing drops of over 5% [8][9].

Market Overview - The market exhibited a "seesaw" effect with high dividend assets performing actively while technology stocks experienced a pullback [1] - The banking and electricity sectors saw gains, while the computing industry chain stocks, including Dekoli, Cambridge Technology, and others, faced significant declines [1] - The Shanghai Composite Index fell by 0.79%, the Shenzhen Component Index dropped by 2.21%, and the ChiNext Index decreased by 2.9% [2] Banking Sector - The banking sector rebounded with notable gains in stocks such as Chongqing Rural Commercial Bank and Shanghai Rural Commercial Bank [3] - The overall performance of the banking sector's mid-year reports showed improvement, with most banks experiencing revenue and profit growth, a stable non-performing loan ratio, and a steady provision coverage ratio [5] - Analysts suggest that the banking sector may see a rotation and rebound due to solid fundamentals and previous adjustments, with a focus on regional banks and high-dividend stocks [6] Electricity Sector - The electricity sector showed strong performance, with stocks like Jingyuntong and Huaguang New Energy experiencing significant increases [8] - In July, the total electricity consumption reached 10,226 billion kWh, marking an 8.6% year-on-year increase, indicating robust demand [9] - Analysts recommend focusing on leading companies in renewable energy, regional offshore wind power firms, and water power stocks with stable performance and growth potential [9]

Core Viewpoint - The management of China Merchants Bank (CMB) expressed confidence in achieving steady progress and completing the annual budget goals despite recent challenges in the banking sector [2][4]. Group 1: Annual Performance Outlook - CMB's net profit growth turned positive in the first half of the year, with the second quarter performing better than the first, which faced significant pressure due to loan repricing [3][4]. - The bank aims to implement strategic development, enhance cost management, promote non-interest income, and strengthen asset quality to maintain a positive growth trajectory [4]. Group 2: Retail Business Strengths - CMB's retail business is supported by three key factors: technological capabilities, a dedicated workforce, and a customer-centric value system [5][6][7]. - Retail assets under management (AUM) reached 16.03 trillion yuan, with the highest growth in recent years, and retail wealth management income increased by 6% year-on-year [5]. Group 3: Balancing Short-term and Long-term Goals - The bank emphasizes the importance of balancing short-term performance with long-term sustainability, likening banking operations to a marathon rather than a sprint [8]. - CMB aims to solidify its foundational aspects, including customer base and management, while focusing on long-term strategic goals [8]. Group 4: Changes in Customer Risk Preferences - There has been a shift in retail customers' risk preferences, with a gradual improvement in their inclination towards equity assets, although a conservative approach remains predominant [9]. - CMB is committed to providing a stable and comprehensive wealth management experience to meet evolving customer needs [9]. Group 5: Return on Equity (ROE) Management - CMB has established a financial management system focused on ROE, which currently stands at 13.85%, significantly higher than the industry average of around 9% [10][11]. - The bank aims to balance profit growth, net asset accumulation, and dividends to maintain a competitive ROE and meet investor expectations [11][12]. Group 6: Internationalization Strategy - CMB is accelerating its internationalization efforts, recognizing it as a new growth point amid increasing global integration and domestic market saturation [13]. - The bank has already established a network of overseas branches and is enhancing the capabilities of its international operations [13].

Market Overview - The Shanghai Composite Index closed at 3844.84 points, above the six-month moving average, with a decline of 0.79% [1] - The total trading volume of A-shares reached 19,304.44 billion yuan [1] Stocks Performance - A total of 35 A-shares have surpassed the six-month moving average, with notable stocks including: - Gongsiao Daji (供销大集) with a deviation rate of 6.45% - Jidian Co. (吉电股份) with a deviation rate of 6.05% - *ST Sansheng (ST三圣) with a deviation rate of 4.29% [1] - Stocks with smaller deviation rates that just crossed the six-month line include: - Fuling Co. (富岭股份) - Hubei Energy (湖北能源) - Yunnan Tourism (云南旅游) [1] Top Stocks by Deviation Rate - The following stocks had the highest deviation rates on September 2: - Gongsiao Daji (供销大集): 9.84% increase, 4.84% turnover rate, latest price 2.68 yuan - Jidian Co. (吉电股份): 7.34% increase, 6.58% turnover rate, latest price 5.56 yuan - *ST Sansheng (ST三圣): 5.10% increase, 2.62% turnover rate, latest price 4.74 yuan [1] Additional Stocks with Notable Performance - Other stocks with significant performance include: - Huayuan Co. (华原股份): 3.93% increase, 2.74% turnover rate, latest price 17.71 yuan - Meiyan Jixiang (梅雁吉祥): 4.59% increase, 7.21% turnover rate, latest price 2.96 yuan - Qingdao Port (青岛港): 2.31% increase, 0.57% turnover rate, latest price 8.87 yuan [1]

Group 1: Annual Performance Outlook - The company believes it can achieve steady progress and meet the budget goals set at the beginning of the year, with a positive outlook for the second half of the year [6][4] - The first quarter faced significant pressure due to loan repricing starting January 1, leading to a decline in net interest margin, but the second quarter showed improvement [6][4] - The company plans to focus on strategic development, cost management, non-interest income growth, and asset quality control to maintain a positive trajectory [6][4] Group 2: Retail Business Strengths - The retail business is supported by three key factors: technological capabilities, a dedicated workforce, and a customer-centric value system [5][7] - Retail assets under management (AUM) reached 16.03 trillion yuan, with the highest growth in recent years, and retail wealth management income increased by 6% year-on-year [7][5] Group 3: Balancing Short-term and Long-term Goals - The company emphasizes that banking is a marathon, not a sprint, and must focus on long-term sustainability rather than short-term gains [11][12] - It aims to strengthen foundational aspects such as customer base, workforce, management, and business to ensure long-term success [11][12] Group 4: Changes in Customer Risk Preferences - There has been a shift in retail customers' risk preferences, with a gradual improvement in their willingness to engage in riskier investments [12][5] - The company aims to adapt to market trends and customer needs to provide a comprehensive wealth management experience [12][5] Group 5: Return on Equity (ROE) Management - The company's ROE is currently at 13.85%, significantly higher than the industry average of around 9%, and it aims to maintain this leading position [13][14] - Future ROE levels will depend on the recovery of profitability, net asset growth, and dividend policies [14][13] Group 6: Internationalization Strategy - The company is accelerating its internationalization efforts, recognizing it as a new growth point amid increasing global integration [15][16] - It has established a network of overseas branches and is enhancing the capabilities of its international operations [16][15]

Group 1 - The China Securities State-Owned Enterprises Dividend Index (000824) decreased by 0.38% as of September 2, 2025, with mixed performance among constituent stocks [1] - The top-performing stocks included Chongqing Rural Commercial Bank (601077) up by 3.45%, Shanghai Rural Commercial Bank (601825) up by 2.97%, and China Merchants Bank (600036) up by 2.22% [1] - The National Enterprise Dividend ETF (159515) was adjusted downwards, with the latest price at 1.14 yuan [1] Group 2 - The National Enterprise Dividend ETF reached a new high in size at 51.2135 million yuan and a new high in shares at 44.7866 million shares in the past month [1] - China Galaxy Securities predicts a volatile upward trend in the A-share market, emphasizing the appeal of dividend assets with high safety margins and low valuations in the current market environment [1] - Everbright Securities highlights the irreplaceable value of dividend assets as core assets in the A-share market, especially with many companies implementing profit distribution plans for the 2024 fiscal year [1] Group 3 - The China Securities State-Owned Enterprises Dividend Index includes 100 listed companies selected for high cash dividend yields, stable dividends, and certain scale and liquidity [2] - As of August 29, 2025, the top ten weighted stocks in the index accounted for 16.84% of the total index weight, with China COSCO Shipping Holdings (601919) being the highest at 2.36% [2][4]

Core Viewpoint - China Merchants Bank (招商银行) is implementing a personal consumption loan interest subsidy policy to reduce consumer credit costs and stimulate consumption potential from September 1, 2025, to August 31, 2026 [1] Group 1: Subsidy Scope - The subsidy applies to personal consumption loans issued by China Merchants Bank, excluding credit card transactions, that are used for consumption and can be identified through the borrower's bank account [2] - The subsidy covers consumption amounts below 50,000 yuan and specific categories of consumption above this threshold, including household vehicles, education, and healthcare [2] Group 2: Subsidy Calculation Rules - The annual subsidy rate is set at 1% of the eligible loan principal, capped at 50% of the loan contract interest rate [3] - Each borrower can receive a maximum subsidy of 3,000 yuan, corresponding to a total eligible consumption amount of 300,000 yuan [3] - For loans below 50,000 yuan, the maximum subsidy is 1,000 yuan, linked to a total eligible consumption of 100,000 yuan [3] Group 3: Subsidy Application Process - Borrowers must sign a supplementary agreement to apply for the subsidy, either at the time of loan application or after loan disbursement [4] - The bank will automatically identify eligible transactions for subsidy; if not identifiable, borrowers can apply through offline channels by providing proof of consumption [5] Group 4: Subsidy Disbursement - The subsidy amount will be deducted directly from the loan interest during the loan settlement process, based on the agreed subsidy rate and limits [7] Group 5: Additional Information - Customers can check their subsidy amounts through the bank's app and will be notified via SMS or app notifications [8] - The bank does not charge any service fees for the subsidy process and warns against fraudulent activities related to loan applications [8][9]