Zhi Tong Cai Jing·2026-01-26 07:31Core Viewpoint - JPMorgan's report indicates that China Merchants Bank (600036)(03968) achieved a 3% year-on-year increase in net profit for the fourth quarter, surpassing Morgan Stanley's forecast by 2 percentage points and exceeding market expectations by 7 percentage points [1] Financial Performance - Operating income rose by 2% year-on-year [1] - The non-performing loan coverage ratio decreased by 14 percentage points quarter-on-quarter to 392% [1] - The non-performing loan ratio remained stable at 0.94% [1] Market Reaction and Ratings - The bank anticipates a positive market reaction to the higher profit growth in the fourth quarter [1] - JPMorgan reiterated an "Overweight" rating with a target price of HKD 61, continuing to list the stock as one of the industry favorites [1] Provisioning and Asset Quality - Morgan Stanley noted that the bank increased provisions for bad debts and write-offs in the last quarter, which helped maintain the stability of non-performing loans, although the provision amount decreased [1] - The bank's high bad debt coverage ratio is expected to mitigate substantial market concerns regarding future profitability, with investor expectations for a recovery in earnings and stable asset quality by 2026 [1]