Shenwan Hongyuan Securities·2025-04-30 05:42Investment Rating - The report maintains a "Buy" rating for China Merchants Bank [1] Core Views - The report highlights that non-interest income pressure has negatively impacted revenue, while interest income continues to show positive growth. The bank's provisioning advantage remains solid, helping to mitigate profit declines [6][8] - In Q1 2025, China Merchants Bank reported revenue of 83.8 billion yuan, a year-on-year decline of 3.1%, and a net profit attributable to shareholders of 37.3 billion yuan, down 2.1% year-on-year [4][6] - The report emphasizes the bank's ability to manage credit risk effectively, with a non-performing loan (NPL) ratio of 0.94% and a provisioning coverage ratio of 410% [4][9] Financial Data and Earnings Forecast - Total revenue forecast for 2025 is 338.02 billion yuan, with a year-on-year growth rate of 0.16% [5] - Net profit attributable to shareholders is projected to be 149.69 billion yuan in 2025, reflecting a year-on-year growth rate of 0.88% [5] - The report anticipates a gradual recovery in performance, with net profit growth rates of 0.9%, 3%, and 5.4% for 2025-2027 [9] Revenue Composition - Non-interest income decreased by 10.6% in Q1 2025, significantly impacting overall revenue growth [6][8] - Interest income showed a positive growth of 1.9% in Q1 2025, contributing positively to revenue despite the decline in non-interest income [6][8] Loan Growth and Credit Quality - Total loans increased by 5.2% year-on-year in Q1 2025, with corporate loans remaining stable while retail loan growth slowed [6][10] - The report notes a shift in retail lending focus towards lower-risk products, with a significant reduction in credit card lending [6][10] Cost of Deposits and Interest Margin - The bank's net interest margin was reported at 1.91% in Q1 2025, with a slight quarter-on-quarter decline of 3 basis points [9][11] - Deposit costs decreased significantly, supporting the bank's interest margin stability [9][11]