China Merchants Bank (600036): Net interest margin increased 6BPS QoQ

China Merchants Bank (600036): Net interest margin increased 6BPS QoQ

Event: China Merchants Bank released the 2019 first quarter performance report.

Investment suggestion: China Merchants Bank ‘s 19Q1 performance was basically in line with expectations. In 19Q1, it expanded loan allocation, reduced investment and asset allocation of the same industry. Thanks to the optimization of asset and liability structure and the expansion of inclusive benefits, net interest margin increased by 6bps.Provisions continued to improve.

Taking into account the advantages of the company’s retail and wealth management, and a prudent risk control culture, it is expected that the company’s attributable net profit growth rate in 2019/20 will be 13 respectively.

1% and 11.

8%, EPS is 3 respectively.


98 yuan / share, the current A-share participation corresponding to 19/20 PE is 10 respectively.

0X / 8.

9X and PB are 1.

55X / 1.

38X, because China Merchants Bank is in the leading position among comparable stock banks in the industry, A / H shares in the past two years the company has consolidated the PB hub at 1.

60X / 1.

Around 40X, we estimate the reasonable value of the company’s A shares at 36.

35 yuan / share, maintain the buy rating, the reasonable value of H shares is 37.

About 07HKD / share, give a hold rating.

Risk Warning: 1.

Economic growth exceeded expectations; 2.

Asset quality has deteriorated severely.

Core point of view: The performance is basically in line with expectations, and the high increase in earnings led to a pre-provision increase in profits in 2019Q1 to achieve revenue of 687.

4 ‰, an increase 杭州桑拿 of 12 in ten years.

14%, the growth rate is faster than 2018A (ten years +12.

52%) down 0.

38pct; Net profit attributable to shareholders of the parent company was 252.

4 ‰, an increase of 11 in ten years.

32%, compared with 2018A (ten years +14.

84%) down 3.

52pcts, performance is basically in line with expectations.

Among them, net interest income was 433.

7 ppm, an increase of 14 in ten years.

31% (VS2018A: +10.

72%, up 3.

59%); net income from program fees was 191.

6 ppm, an increase of ten years.

25% (VS2018A: +3.

85%, down 2.

59 pcts); realized profit before provision 252.

40,000 yuan, an increase of 13 in ten years.

24% (VS2018A: +11.11%, up 2.


Thanks to the optimization of the asset-liability structure and the inclusive reduction and exemption, the net interest margin increased by 6bps from the Q1 2019Q1 company’s net interest margin2.

72%, an increase of 17bps per year, an increase of 6bps from the previous month; net interest margin is 2.

59%, up 16bps and 7bps from the previous quarter, mainly due to the improvement of the asset-liability structure, the increase of credit assets within retail loans and the inclusion of exempt financial credits.

In 1Q1, it increased loan placements, and reduced investment and inter-bank asset allocation1.

In 1Q1, the company’s total assets were 67,943 million, a year-on-year increase of 8.

67%, an increase of 0 from the previous month.

72% (VS18Q4: +3.

64%), Q1 assets expanded slightly, of which loans expanded by US $ 4,125.8 billion, a year-on-year increase of 11.

02%, an increase of 4 from the previous month.

90% (VS18Q4: -0.

52%), a relatively rapid growth; while 19Q1 interbank assets and investment assets contracted month-on-month, 19Q1 interbank assets scale was 463.9 billion yuan, a significant contraction of 24.

3%; investment assets amounted to 16,658 trillion, down slightly from the previous quarter.



The resistance budget is $ 62,213 trillion, an increase of 8 per year.

14%, a slight increase of 0 from the previous month.

31% (VS18Q4: +3.

72%); The balance of deposits in 19Q1 was 4,454.9 billion yuan, an annual increase of 9.

54%, an increase of 0 from the previous month.

62% (VS18Q4: +2.

97%), the chain growth rate has improved; coping with bonds increased significantly 7.

44% (VS18Q4: +18.

50%) to 4,565 trillion; inter-bank debt contracted by 6.

32% (VS18Q4: +6.

85%) to 1.085 billion yuan.

In 19Q1, the bad generation rebounded slightly, and the provision continued to improve.

2019Q1 NPL ratio 1.

35%, a decrease of 1bp from the previous month; the balance of non-performing loans increased by 20 from the previous month.

400 million to 556.

4.5 billion.

Asset quality performance is still outstanding, and the industry will remain at a higher level in the future.


After calculation, write-off and roll-out of the 2019Q1 annualized badly generated replacement 0.

92% (VS2018A: 0.

63%), the bad generation slightly rebounded but still at the industry performance level.


Provision coverage at the end of 2018 increased by 5pcs to 363.
2%, the loan-to-loan ratio increased by 2bps to 4.
90% are in the forefront of large and medium-sized banks.