Jie Mian Xin Wen·2025-03-26 09:49Core Viewpoint - The stock prices of China Merchants Bank (CMB) fell over 5% following the release of its annual report, indicating market disappointment with the bank's performance, particularly regarding its revenue and net interest margin [1][2]. Financial Performance - CMB reported operating revenue of 337.49 billion yuan, a year-on-year decrease of 0.48% [2] - The net profit attributable to shareholders was 148.39 billion yuan, reflecting a year-on-year increase of 1.22% [1] - This marks the second consecutive year of revenue decline for CMB, with expectations of continued negative pressure on revenue due to factors like bond market adjustments and loan repricing [2]. Market Reaction - The decline in stock prices was attributed to concerns over the bank's future profitability, driven by a drop in revenue and a weakening consumer confidence [1]. - The net interest margin for 2024 is projected to be 1.98%, down 17 basis points year-on-year, indicating pressure on the bank's interest income [2]. Dividend Policy - CMB announced a dividend plan for 2024, proposing a cash distribution of 50.44 billion yuan, which represents 35.32% of the net profit attributable to shareholders, slightly up from 35.01% in 2023 [3]. - The bank also plans to implement a mid-term dividend for the first time since its listing, scheduled for early 2026 [3]. Valuation Context - As of March 26, CMB was the only bank among 42 listed A-share banks with a price-to-book ratio greater than 1, while 98% of the others were trading below their book value [3]. - CMB's stock has seen a cumulative increase of 52.04% in 2024, with a year-to-date rise of 14.73%, ranking it first among A-share listed banks [3]. Industry Outlook - Analysts emphasize the need for banks to improve their fundamentals, including business transformation and expansion of intermediary services, to enhance market confidence and overall valuation [5].