Forecast: 23.2% year-on-year increase in 2021 net profit from the same period last year

In 2021, China Merchants Bank realized revenue / return net profit of 331.234 billion / 119.922 billion respectively, an increase of 14.03% and 23.2% respectively over the same period last year. Of the revenue, non-interest income reached 127.315 billion, an increase of 20.73% over the same period last year. The annualized ROE was 16.94%, an increase of 1.21% over the same period last year.

At the end of 2021, the non-performing loan ratio was 0.91%, down 0.16 percentage points from the end of last year. The provision coverage rate reached 441.34%, an increase of 3.66 percentage points over the end of last year. The loan reserve ratio was 4.03%, 0.64 percentage points lower than at the end of last year.

The overall figure was slightly higher than our model predicted, with revenue growth at the highest level since 2016. China Merchants Bank, as the leader of wealth management, will gradually reduce the sensitivity to macro growth in the future.

Investment suggestion

It is estimated that the homing profit from 2022 to 2024 will be 1396.50 pound 1675.11 billion yuan respectively, an increase of 16.45%, 19.95% and 15.28% over the same period last year, and the corresponding EPS will be 5.47kg 6.58max 7.59 yuan respectively. Reasonable valuation center 1.5187 trillion, given a "buy" rating.

Risk hint

Macroeconomic growth was lower than expected.