China Merchants Bank (600036) Interpretation of China Merchants Bank’s 2018 Annual Report: When the performance is excellent, push 3.
Annual report highlights: 1. Overall performance maintained a two-digit upward trend and net profit increased by 14.
2. The optimization of asset structure, the stability of the capital side promoted the interest margin to be significantly increased by 12bp to 2 from the previous quarter.
66%, interest-earning asset yields are up 13bp from the previous month; the negative end remains stable, only 1bp from the previous quarter.
3. Asset quality remains stable and excellent.
Bad double drop, bad rate dropped by 6bp to 1 from the previous month.
Provisioning capacity for bad coverage has been greatly improved, and provisioning coverage has increased by 32 points from the previous quarter to 358%.
Insufficient annual reports: 1. The fee growth was weak in the second half of the year, which slightly dragged down revenue growth.
2. The cost-to-income ratio is relatively high, and the annualized cost-to-income ratio in a single quarter is as high as 42%, which is an increase of 2 over the same period last year.
3. The core tier one capital adequacy ratio decreased by 19bp (the advanced method is affected by measurement rules such as the bottom line plus return, the capital adequacy ratio decreased, and the core tier one core method decreased by 2bp).
The growth rate of net profit maintained a steady two-digit upward trend. Revenue was affected by regulatory fees, and the growth rate fell. PPOP, under the background of increased management fees, was further lower than revenue growth.
In the first quarter of 2018, 1H18, 1-3 quarters 18, and 2018 quarterly revenue growth growth rates were 7 respectively.
4 averages, PPOP is 2.
9% / 9.
4% / 12.
7% / 11.
1%, net profit attributable to mother is 13.
5% / 14% / 14.
6% / 14.
Full year 2018 performance growth and growth expectations: scale, interest spreads, and provisions continue to contribute positively to performance factors.
The negative contribution factors are non-interest, cost, and performance (with the impact of the new accounting 天津夜网 standards removed).
Taking a closer look at the changes in the contribution of various factors, the marginal contribution to performance has improved: 1. The scale growth rate has increased compared with the third quarter growth rate.
2. The positive contribution of provision has increased.
3. Negative fiscal contribution.
The marginal contribution decline is: 1, the net interest margin is positively contributing to performance, but slightly inclined compared to the third quarter.
2. The negative contribution of non-interest income and management costs increased.
Investment suggestion: China Merchants Bank’s annual report index indicators show that it is solid and high-quality fundamentals, indeed “the return of the king”.
More importantly, China Merchants Bank has a sense of crisis in good times, and continues to promote retail transformation, and its strategy is strong; on the existing system of retail business, its moat can continue to deepen and adapt to the latest development of financial technology.
China Merchants Bank has a high degree of “scarcity” in banking stocks and is worth holding for a long time.
China Merchants Bank is an outstanding company that we focus on and recommend continuously.The company currently corresponds to 2018 and 2019 EPB 1.
61X / 1.
44X; PE 10.
13X / 9.
14X (Share Bank PB 0.
88X / 0.
79X, PE 7.
16X / 6.
Risk reminder: The macro economy is facing downward pressure, and performance management is less than expected.