Skip to Content

China Merchants Bank Co Ltd Class H 03968

Morningstar Rating
HKD 30.95 0.00 (0.00%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

China Merchants Bank Earnings: 13.5% Increase in Dividends per Share Is a Major Surprise; Results Were in Line

We retain our fair value estimate on China Merchants Bank, or CMB, at HKD 48 per H share (CNY 45 per A share) after the in-line results, with shareholders' net profits increasing 6.2%, despite total revenue declining 1.4% from 2022. Net interest margin, or NIM, is also in line, contracting 25 basis points to 2.15% from 2022. The positive came from a surprise 13.5% rise in dividends per share, or DPS, that saw dividend payout rise to 35%, up from 33% in 2022, sending the H-share price up 4%. We believe this suggests bank leadership's confidence in its long-term growth and above-peer return on equity. This will mark 10 years of dividend progression, with compound annual growth rate at 12.2%.

Price vs Fair Value

03968 is trading at a 38% discount.
Price
HKD 30.00
Fair Value
HKD 44.00
Uncertainty
Medium
1-Star Price
HKD 95.10
5-Star Price
HKD 32.70
Economic Moat
Xcmlry
Capital Allocation
Dlzffrjc

Bulls Say, Bears Say

Bulls

CMB expected to add 15 million, or nearly 10% of its 160 million customer pool from 2021 to 2023. Its number of retail customers already surpassed its target, reaching 184 million by end-2022.

Bears

There remain plenty of uncertainties regarding how quickly the consumer confidence will recover after China's reopening.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if 03968 is a good fit for your portfolio.

News

Trading Information

Previous Close Price
HKD 30.95
Day Range
HKD 30.3031.20
52-Week Range
HKD 24.2043.05
Bid/Ask
HKD 30.90 / HKD 30.95
Market Cap
HKD 780.55 Bil
Volume/Avg
25.9 Mil / 23.6 Mil

Key Statistics

Price/Earnings (Normalized)
4.97
Price/Sales
2.16
Dividend Yield (Trailing)
6.11%
Dividend Yield (Forward)
6.11%
Total Yield
6.11%

Company Profile

China Merchants Bank, with headquarters in Shenzhen, was founded in 1987. The bank is China's seventh-largest listed bank by assets, with the largest distribution network among China's joint-stock banks. CMB's network has been expanding rapidly. Its outlets are located mainly in China's more developed areas, including the Pearl River and Yangtze River deltas. The firm has 18% and 82% of its shares listed on the Hong Kong and Shanghai exchanges, respectively. It has no foreign strategic investors. China Merchants Group is its largest shareholder, with a 30% stake. Retail banking, corporate banking and wholesale banking accounted for 57%, 41%, and 2% of total profit before tax, respectively, and 56%, 41%, and 3% of total revenue in 2023.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
116,529

Competitors

Valuation

Metric
03968
000001
01658
Price/Earnings (Normalized)
4.974.904.30
Price/Book Value
0.760.510.47
Price/Sales
2.161.321.59
Price/Cash Flow
7.002.69
Price/Earnings
03968
000001
01658

Financial Strength

Metric
03968
000001
01658
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
03968
000001
01658
Return on Assets (Normalized)
1.38%0.85%0.62%
Return on Equity (Normalized)
16.75%12.08%12.64%
Return on Invested Capital (Normalized)
Return on Assets
03968
000001
01658
See how this stock stacks up to its competitors with Morningstar Investor

Banks - Regional Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BNPQY
BNP Paribas ADRRltprymjdRhvt$81.5 Bil
USB
U.S. BancorpPjwsbrtbSksx$69.7 Bil
ISNPY
Intesa Sanpaolo ADRCxrbtbzzmNdwq$66.4 Bil
PNC
PNC Financial Services Group IncDwctfqpDdzrp$64.3 Bil
ITUB
Itau Unibanco Holding SA ADRLjhknnxHln$63.2 Bil
TFC
Truist Financial CorpZwsgwvjzGbfpn$52.0 Bil
MFG
Mizuho Financial Group Inc ADRVlwmvnqcLdwk$50.1 Bil
LYG
Lloyds Banking Group PLC ADRQckfmzbmRvlyg$41.6 Bil
DB
Deutsche Bank AGSyrMkkrd$31.4 Bil
NWG
NatWest Group PLC ADRRsrkhWjp$29.3 Bil

Sponsor Center