China Merchants Bank (600036) 19th Annual Results Express Commentary: Profits Maintain High Growth and Asset Quality Continues to Outstanding

China Merchants Bank (600036) 19th Annual Results Express Commentary: Profits Maintain High Growth and Asset Quality Continues to Outstanding

On January 17, China Merchants Bank announced the 2019 annual results report, and achieved net profit attributable to its mother in 928 in 19 years.

6.7 billion, a year-on-year increase of +15.

28%; revenue 2697.

500 million, a year-on-year increase of +8.

53%; annualized ROE is 16.

84%, an increase of 0 every year.

27 points.

Year-end NPL ratio 1.

16%, a decrease of 3BP from the previous month and a decrease of 20BP in ten years.

Opinion: The net interest margin decreased slightly from the previous quarter, mainly due to the decline in LPR and the adjustment of asset structure.

We estimate a 19-year net interest margin of 2.

61%, down 4BP from the previous month.

In the end: the policy guides the financing cost of the real economy to decline; since the fourth quarter, the one-year LPR has gradually decreased by 10BP, and the five-year LPR has decreased by 5BP, which has led to a decline in the interest rate of new loans.

The company’s personal loan scale to increase yields through asset securitization (the company issued a total of mortgage loans in the fourth quarter, consumer loan asset-backed securities 659).

1.2 billion), lowering the asset-side rate of return to a certain extent.

Increase tax-exempt assets and lower the rate of return on assets.

The real income rate in 19 decreased from 18 years.

Nine shareholders, we judge that there may be an increase in tax-exempt assets such as treasury bonds and local bonds, resulting in a lower average return on assets.

Support the steady growth of net profit in the fourth quarter with the strategy of volume replenishment.

Net profit for the fourth quarter of 19 was 156.

28 billion, an increase of 18 a year.

6%; the highest growth rate; unless at the same time due to the narrowing of interest margins; represented by the strategy of volume premium (19 years increase in debt appreciation 14.
).

2%, an increase of 3% over 18 years.

9pct).

It is expected that the transformation of the LPR pricing mechanism will be further accelerated in 2020. Taking into account the space transmission of the credit structure of China Merchants Bank, the interest margin will remain stable; driven by the dynamic growth of scale, the growth rate of net profit will promote the maintenance of the height of the industry.

The NPL ratio decreased month-on-month, and asset quality continued to be excellent.

As the company’s write-off and disposal efforts continue to increase, the NPL ratio at the end of 19 was 1.

16%, a decrease of 3BP from the previous month, and a decrease of 20BP from the previous month; the balance of non-performing loans was 52.1 billion, a decrease of 12 billion from the previous month.

Risk control continued to be prudent, and asset quality remained outstanding.

Based on the 南宁桑拿 decline in the balance of non-performing loans, it is judged that the provision coverage ratio in 19 years will continue to rise; the provision will be solid, and the profit margin will be reversed.

Investment suggestion: Net profit should maintain rapid growth, thick provisioning, large companies with high profit margins will have a relatively high retail business, prudent risk control, stable asset quality, and will be relatively less affected by economic changes.

It is estimated that the net profit growth rate in 20/21 will be 14.

9% / 14.

6% to the company 1.

8 times the 20-year PB target estimate, corresponding to 48.

26 yuan, maintain “highly recommended” level.

Risk Warning: The decline of economic stall will lead to the deterioration of asset quality, and the regulatory changes will be less than expected.