China Merchants Bank continues to increase investment in fintech resources to comprehensively promote digital transformation and development. The company focuses on building a value cycle chain for big wealth management and further promotes the digital transformation and development of the entire bank and the upgrading of the 3.0 business model. Recently, Moore Thread signed a strategic cooperation agreement with the Beijing branch of China Merchants Bank. The two sides will focus on banking fintech business and rely on their respective resources and advantages to jointly explore and promote the application of multi-function GPUs in the field of fintech, continuously optimize the user experience through technological innovation, and build new scenarios for digital infrastructure finance applications in China. The two sides will use this signing as an opportunity to open a new starting point for cooperation between Moore Thread and CMB North Branch, achieve complementary advantages and win-win business, jointly promote the implementation of bank fintech business in more scenarios, create a more convenient and intelligent user experience, drive growth through digitalization, and ultimately achieve the goal of digital transformation.

The net profit growth rate for January-January 2022 declined somewhat compared to the same period last year. The company achieved net operating income of 91,999 billion yuan (same below), up 8.43% year on year; net profit of 36.022 billion yuan, up 12.52% year on year; net interest income of 54.464 billion yuan, up 9.97% year on year; realized net non-interest income of 37.535 billion yuan, up 6.27% year on year; average return on total assets (ROAA) attributable to shareholders after annualization (ROAA) and annualized average return on net assets (ROAE) attributable to common shareholders were 1.54% and 19.24% respectively, up 0.04 from the previous year and a decrease of 0.30 percentage points.

The quality of the company's assets weakened slightly in January-January 2022. At the end of March, the company's total assets were $94,15.379 billion, up 1.80% from the end of the previous year; total loans and advances amounted to $5,58,105 billion, up 3.38% from the end of the previous year; total liabilities amounted to 85,14.645 billion yuan, up 1.57% from the end of the previous year; and total customer deposits amounted to $6,680,094 billion, an increase of 5.25% over the end of the previous year. The company's non-performing loan balance was $54.138 billion, up $3.276 billion from the end of the previous year; the non-performing loan ratio was 0.94%, up 0.03 percentage points from the end of the previous year; the provision coverage ratio was 462.68%, down 21.19 percentage points from the end of the previous year; and the loan provision ratio was 4.35%, down 0.07 percentage points from the end of the previous year.

Investment advice: China Merchants Bank continues to increase its investment in fintech resources to comprehensively promote digital transformation and development in line with the development trend of the industry. I recommend buying it.