投资建议：根 据三季报及基准利率下调情况，调整2024-2026 年净利润增速预测为0.2%、0.5%、3.8%，对应BVPS 为41.25(+0.39)、45.06(-0.11)、49.09(-0.59)元/股。考虑到一揽子稳经济政策密集出台，利好银行风险缓释和信贷需求恢复，推动板块估值回升。上调目标价至43.75 元，对应2024 年1.05 倍PB，维持增持评级。Introduction to this report:
The revenue and net profit growth rate reported by China Merchants Bank for the third quarter of 2024 is in line with expectations. Asset quality continues to be pressured by stable, moderate, and poor retail sales, but provisions are sufficient. The target price was raised to 43.75 yuan to maintain an increase in holdings rating.
Key points of investment:
Investment advice: Based on the three-quarter report and the reduction in the benchmark interest rate, the 2024-2026 net profit growth forecast is 0.2%, 0.5%, and 3.8%, and the corresponding BVPS is 41.25 (+0.39), 45.06 (-0.11), and 49.09 (-0.59) yuan/share. Considering the intensive introduction of a package of economic stabilization policies, it is beneficial for banks to mitigate risk and recover credit demand, and push sector valuations back up. The target price was raised to 43.75 yuan, corresponding to 1.05 times PB in 2024, maintaining an increase in holdings rating.
The performance growth rate is in line with expectations. The Q3 net profit growth rate for the single quarter has been corrected first, and profit is expected to maintain positive growth throughout the year. On the revenue side, the year-on-year decline in net interest income and net handling fee revenue narrowed quarterly. The former was mainly due to improvements in debt costs, which led to a narrowing of the year-on-year decline in interest spreads, while the impact of the reduction in agency business rates gradually subsided. The year-on-year decline in wealth management revenue in 24Q3 narrowed from -32.6% in Q1 to -16%. In terms of scale expansion, CMB maintained a steady growth rate slightly below the industry average, so that there was more room to balance price and risk. Other non-interest rates have been affected by fluctuations in the bond market since August, and the growth rate is expected to slow down. Considering the impact of stock mortgage interest rate adjustments and the seesaw effect on equity bonds, 24Q4 revenue is still under some pressure. On the profit side, 24Q3 business and management expenses were reduced by 12% year on year (of which employee expenses decreased by 14%), which corrected PPOP's year-on-year growth rate to 1.6%. However, in combination with the current economic environment and retail risk exposure pressure, CMB was more restrained in releasing provisions. The 24Q3 impairment accrual increased by 8.5% year-on-year, causing the net profit growth rate to fall to 0.8%. The annual growth rate is expected to be around zero.
The year-on-year growth rates of 24Q3 assets and deposits increased by 1.4 pct and 1.5 pct to 9.2% and 9.4% respectively at the end of Q2. Loan size recovered and increased, but the year-on-year growth rate slowed further to 4.7%. 24Q3 loans basically continued the changes in Q2. On the margins, investment in public loans generally improved slightly, adding 2.2 billion yuan; note discount pressure dropped by 5.5% (Q2 pressure dropped 17.4%), and interest spreads narrowed, and CMB focused on improving capital use efficiency; retail loans increased by 32.7 billion yuan, less increase from year to month, and it will take time to repair residents' credit needs. The gap in the declining share of loans was filled by bond investment, which structurally increased the decline in return on assets. In 24Q3, deposits maintained a relatively rapid growth rate and increased year-on-year. The share of debt increased by 0.4 pct to 83.1%, but the regularization trend continued, and the current share fell to 4.3 pct to 48.7%.
The overall quality of assets remained steady, and various quality indicators of public loans were further improved, but the generation of poor retail sales was still under pressure. In 24Q3, it rose to 1.6%, contributing 60% of the new bad sales.
Risk warning: Demand recovery fell short of expectations; retail loan risk exposure exceeded expectations.
