Shenwan Hongyuan Securities·2026-01-25 12:33Investment Rating - The report maintains a "Buy" rating for China Merchants Bank, indicating a positive outlook for the stock [8]. Core Insights - The bank's revenue for 2025 is projected to be RMB 337.5 billion, showing a slight year-on-year increase of 0.01% [6][8]. - The net profit attributable to shareholders is expected to reach RMB 150.2 billion in 2025, reflecting a year-on-year growth of 1.2% [6][8]. - The bank's non-performing loan (NPL) ratio remains stable at 0.94% for the fourth quarter of 2025, with a provision coverage ratio of 392% [6][8]. Financial Data and Profit Forecast - Total revenue for 2025 is estimated at RMB 337.5 billion, with a year-on-year growth rate of 0.01% [7]. - Net interest income is projected to grow by 2% in 2025, contributing to the overall revenue stability [8]. - The bank's return on equity (ROE) is expected to decline to 13.43% in 2025, down from 14.49% in 2024 [7][12]. - The provision coverage ratio is forecasted to decrease to 391.79% by 2026, indicating a potential increase in credit risk [7][12]. - The bank's earnings per share (EPS) is projected to be RMB 5.70 in 2025, with a gradual increase to RMB 6.07 by 2027 [7][12]. Market Position and Valuation - The current price-to-book (PB) ratio for China Merchants Bank is 0.76, suggesting that the stock is undervalued relative to its book value [8]. - The dividend yield is approximately 5.4%, which is attractive for income-focused investors [9][8]. - The bank's stock performance is influenced by broader market trends, particularly in the context of index fund flows [8].