Event: China Merchants Bank announced on May 20 that the board of directors held the 40th meeting of the eleventh session of the board of directors on May 19, 2022, examined and adopted the "motion on the appointment of Mr. Wang Liang as president of China Merchants Bank" and agreed to appoint Mr. Wang Liang as president of China Merchants Bank. The term of office is from the date of approval of the Bank of China Ltd. Insurance Regulatory Commission to the date of expiration of the eleventh board of directors.
The new president confirmed that Wang Liang, the new president and party committee secretary, has a professional and sound style, which is conducive to the continuation of China Merchants Bank's strategy and business. President Wang Liang joined China Merchants Bank Beijing Branch in 1995 and has been in charge of the company for 27 years. Previously, he was the executive vice president of the company and was very familiar with China Merchants Bank's development process, strategy, business and management. The management determines that it is conducive to the continuation of China Merchants Bank's strategy and business, as well as to stabilize the team and maintain China Merchants Bank's competitive advantage.
China Merchants Bank has been deeply engaged in retail over the past 40 years, and his strategy has maintained a strong continuity and stability, and has been continuously deepened. he will continue to broaden his advantages in the retail field in the future. China Merchants Bank's first retail transformation in 2004. Established a comprehensive retail product system represented by all-in-one card and golden sunflower financial management products; began the second transformation of China Merchants Bank in 2009, and deepened the second transformation of China Merchants Bank in 13 years: positioning light banks plus one body and two wings; China Merchants Bank put forward the transformation strategy of building fintech Bank 3.0 in 2017, and explored the 3.0 model of the digital era in 2018. In 2021, we put forward the 3.0 model of "big wealth management business model + digital operation mode + open and integrated organization model". Through the integration of online and offline all-channel mode, drive the continuous growth of retail customers.
China Merchants Bank's fundamentals remain sound, his unique "moat of business model" has been forged in the retail and wealth management circuit, and his competitiveness to the public continues to improve. 1. Wealth management takes the lead in all directions, and it is very likely that it will become the top enterprise. 2. Retail business can maintain a leading position for a long time. 3. The competitiveness of the public continues to improve, driving wealth and retail business.
The reason why China Merchants Bank can continue to create its unique value lies in the good corporate governance mechanism. China Merchants Bank has implemented the "president responsibility system under the leadership of the board of directors" for a long time. With a highly responsible attitude to China Merchants Bank, the board of directors maintained the stability and continuity of China Merchants Bank and made prudent choices and decisions for the new president. The major shareholder of China Merchants Group is one of the most market-oriented and international groups. In the past 40 years, it has elected three excellent presidents for China Merchants Bank and designed a market-oriented corporate governance structure with president responsibility and moderate supervision for China Merchants Bank. The benign interaction between "leadership of the board of directors" and "president responsibility system" makes China Merchants Bank management always have day-to-day operational autonomy and fully maintain market-oriented vitality; it also makes the long-term strategy stable and continuous, and there has been no obvious deviation and wavering in the past 40 years.
Under the excellent corporate culture, China Merchants Bank has also created a professional, enterprising middle and senior level and business backbone team, with sufficient follow-up hematopoietic ability, which can bring continuous driving force for business development. Under the excellent corporate governance structure, China Merchants Bank has formed an internal market-oriented and external customer-oriented "corporate culture" for a long time, and trained a large number of pragmatic, diligent, professional, enterprising and decent middle-level and business backbone "team members".
Investment advice: the endogenous driving force of performance is the most sustained, with continuous focus on recommendation. The current share price of the company corresponds to 2022E, 2023E PB 1.22X 7.45X/6.49X 1.07X 7.45X/6.49X (PB 0.56X debacle 0.50X 4.93X/4.5X). China Merchants Bank's indicators show its sound and excellent fundamentals at the same time, strong strategic implementation, retail business in the existing system, its moat can continue to deepen to adapt to the latest development of financial technology. China Merchants Bank has a high "scarcity" in banking stocks, which is worth holding for a long time, and is an excellent company that we focus on and continue to recommend.
Risk hint: the economic downturn is higher than expected, and the company's operation is not as expected.