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China Merchants Bank (CIHKY)
OTHER OTC:CIHKY
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China Merchants Bank
(OTC:CIHKY)
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Rating:73Outperform
Price Target:
$35.00
▲(9.24% Upside)
China Merchants Bank's strong financial performance and attractive valuation are key strengths, but mixed technical indicators and challenges highlighted in the earnings call temper the overall outlook. The stock is fundamentally strong, but monitoring revenue trends and market conditions is crucial.
China Merchants Bank (CIHKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$150.91B
Dividend Yield4.38%
Average Volume (3M)2.29K
Price to Earnings (P/E)7.9
Beta (1Y)0.28
Revenue Growth-2.87%
EPS Growth2.19%
CountryUS
Employees117,201
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)N/A
Shares Outstanding918,180,240
10 Day Avg. Volume1,781
30 Day Avg. Volume2,292
Financial Highlights & Ratios
PEG Ratio12.22
Price to Book (P/B)0.79
Price to Sales (P/S)3.25
P/FCF Ratio2.34
Enterprise Value/Market Cap2.23
Enterprise Value/Revenue0.92
Enterprise Value/Gross Profit1.02
Enterprise Value/Ebitda2.53
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
China Merchants Bank Business Overview & Revenue Model
Company DescriptionChina Merchants Bank Co., Ltd. (CIHKY) is a leading commercial bank in China, headquartered in Shenzhen. Established in 1987, it has expanded its services to include personal banking, corporate banking, and treasury operations. The bank offers a wide range of financial products, including loans, deposits, investment banking, wealth management, credit cards, and other financial services. With a strong presence in both domestic and international markets, China Merchants Bank aims to leverage technology and innovation to enhance customer service and operational efficiency.
How the Company Makes MoneyChina Merchants Bank generates revenue through multiple key streams, primarily from interest income and service fees. The majority of its income comes from interest on loans provided to individuals and businesses, which constitutes a significant portion of its net interest income. The bank also earns fees from various services such as wealth management, credit card operations, and transaction services. Additionally, it engages in investment banking activities, including underwriting and advisory services, which contribute to its revenue. The bank benefits from partnerships with various financial institutions and corporations that enable it to expand its service offerings and reach a broader customer base. Economic factors, regulatory changes, and the overall financial market landscape also influence its earnings.
China Merchants Bank Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 23, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong asset growth, positive profit growth, and improvements in wealth management fee income as highlights. However, challenges such as decreased operating income, a narrowing NIM, and issues in the credit card segment indicate areas of concern. The bank also faces pressure from declining ROE and a shrinking noninterest income. Despite these challenges, the bank's robust asset quality and international expansion efforts are notable positives.Q2-2025 Updates
Positive Updates
Record Asset Growth
CMB's total assets amounted to RMB 12.66 trillion, an increase of 4.16%. Total loans and advances grew by 3.31% to RMB 7.12 trillion.
Positive Profit Growth
Net profit attributable to shareholders was RMB 74.9 billion, a year-on-year increase of 0.25%.
Net Interest Income Increase
Net interest income was RMB 106.08 billion, a year-on-year increase of 1.57%.
Strong Asset Quality
NPL ratio was 0.93%, a decrease of 0.02 percentage points. Allowance coverage ratio remained high at 410.93%.
Wealth Management Fee Income Growth
Reversed a previous downward trend with an 11.89% year-on-year increase.
International Business Expansion
Total assets of overseas institutions increased by 6.56%, and net operating income rose by 23.72% year-on-year.
Negative Updates
Decreased Operating Income
Net operating income was RMB 169.9 billion, a year-on-year decrease of 1.73%.
Narrowing Net Interest Margin
NIM was 1.88%, decreased by 12 bps year-on-year.
Decline in Noninterest Income
Noninterest income was RMB 63.8 billion, a year-on-year decrease of 6.77%.
Credit Card Business Challenges
Credit card transaction value reached RMB 2.02 trillion, down by 8.54% year-on-year. Credit card fee income decreased by 16%.
ROE Decline
ROE decreased by 1.59 percentage points to 13.85%.
Company Guidance
In the recent call discussing China Merchants Bank's (CMB) 2025 interim results, several key financial metrics were highlighted. Net operating income stood at RMB 169.9 billion, reflecting a year-on-year decrease of 1.73%, while net profit attributable to shareholders slightly increased by 0.25% to RMB 74.9 billion. The Return on Average Assets (ROAA) and Return on Average Equity (ROAE) remained robust at 1.21% and 13.85% respectively, maintaining industry-leading levels. The Net Interest Margin (NIM) was reported at 1.88%, a decrease of 12 basis points year-on-year. Total assets grew by 4.16% to RMB 12.66 trillion, with total liabilities increasing by 4.05% to RMB 11.36 trillion. Despite a challenging environment with narrowing interest spreads, CMB achieved a cost-to-income ratio of 30.11%. The bank also managed to reduce the annualized average cost rate of interest-bearing liabilities by 37 basis points to 1.35%. Asset quality remained stable, with a Non-Performing Loan (NPL) ratio of 0.93%, down by 0.02 percentage points. The allowance coverage ratio was 410.93%, reflecting strong risk compensation capability. Overall, CMB's strategy focused on maintaining a balance between quality, profitability, and scale amid a complex economic landscape.China Merchants Bank Financial Statement Overview
Summary
China Merchants Bank demonstrates strong profitability and cash flow generation, with efficient operations and moderate leverage. However, the recent decline in revenue growth is a concern that needs to be addressed to sustain long-term growth.Income Statement
China Merchants Bank shows strong profitability with a high gross profit margin of 88.47% and a net profit margin of 41.09% for the TTM period. However, the revenue growth rate has been negative recently, indicating a potential concern in revenue generation. The EBIT and EBITDA margins are also robust, reflecting efficient operations despite the revenue decline.75
Positive
Balance Sheet
The bank maintains a healthy debt-to-equity ratio of 0.53, indicating moderate leverage. The return on equity is strong at 12.47%, showcasing effective utilization of equity. However, the equity ratio is not explicitly provided, which could provide further insights into the company's financial stability.70
Positive
Cash Flow
The cash flow statement reveals a significant free cash flow growth rate of 89.11% in the TTM period, indicating strong cash generation capabilities. The free cash flow to net income ratio is over 1, suggesting that the company is generating more cash than its net income, which is a positive sign for liquidity.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 365.06B | 297.14B | 297.80B | 287.99B | 265.29B | 225.61B |
| Gross Profit | 330.21B | 297.14B | 297.80B | 342.26B | 265.29B | 225.61B |
| EBITDA | 133.26B | 0.00 | 0.00 | 179.72B | 161.70B | 0.00 |
| Net Income | 148.58B | 148.39B | 146.60B | 138.01B | 119.92B | 97.34B |
Balance Sheet | ||||||
| Total Assets | 12.66T | 12.15T | 11.03T | 10.14T | 9.25T | 8.36T |
| Cash, Cash Equivalents and Short-Term Investments | 1.24T | 1.21T | 1.07T | 960.91B | 846.62B | 876.67B |
| Total Debt | 433.19B | 493.38B | 436.55B | 429.69B | 631.11B | 609.26B |
| Total Liabilities | 11.36T | 10.92T | 9.94T | 9.18T | 8.38T | 7.63T |
| Stockholders Equity | 1.29T | 1.23T | 953.39B | 945.50B | 858.75B | 723.75B |
Cash Flow | ||||||
| Free Cash Flow | 449.75B | 412.09B | 181.39B | 535.25B | 157.89B | 402.20B |
| Operating Cash Flow | 473.30B | 447.02B | 211.55B | 570.14B | 182.05B | 421.33B |
| Investing Cash Flow | -412.23B | -292.86B | -255.11B | -513.93B | -19.70B | -240.75B |
| Financing Cash Flow | -101.67B | 2.15B | 546.71B | -297.03B | 89.36B | -211.79B |
China Merchants Bank Technical Analysis
Positive
32.04
Price Trends
30.72
Positive
31.74
Positive
29.97
Positive
Market Momentum
0.46
Negative
64.67
Neutral
82.49
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIHKY, the sentiment is Positive. The current price of 32.04 is above the 20-day moving average (MA) of 31.00, above the 50-day MA of 30.72, and above the 200-day MA of 29.97, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 64.67 is Neutral, neither overbought nor oversold. The STOCH value of 82.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIHKY.
China Merchants Bank Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $71.74B | 11.80 | 11.31% | 3.65% | 1.94% | 30.93% | |
| ― | $72.58B | 10.82 | 11.71% | 4.33% | 2.95% | 33.77% | |
| ― | $150.91B | 7.85 | 14.30% | 4.38% | -2.87% | 2.19% | |
| ― | $110.84B | 17.69 | 17.41% | 0.83% | 10.85% | 7.98% | |
| ― | $175.28B | 22.45 | 14.17% | 0.19% | -1.78% | 0.65% | |
| ― | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
| ― | $81.47B | 14.20 | 8.69% | 1.44% | -2.22% | 24.37% |
* Financial Sector Average
CIHKY
China Merchants Bank
32.04
8.41
35.59%
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IBN
Icici Bank
31.02
0.81
2.68%
MFG
Mizuho Financial
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2.38
56.26%
PNC
PNC Financial
181.02
-0.53
-0.29%
USB
US Bancorp
46.64
0.41
0.89%
China Merchants Bank Corporate Events
China Merchants Bank Reports Mixed 2025 Interim Results
Sep 1, 2025
China Merchants Bank Co., Ltd. is a leading Chinese financial institution headquartered in Shenzhen, providing a wide range of wholesale and retail banking services both domestically and internationally. In its latest earnings report for the first half of 2025, China Merchants Bank reported a slight decline in net operating income to RMB169.923 billion, a decrease of 1.73% compared to the previous year. Despite this, the bank’s net profit attributable to shareholders saw a modest increase of 0.25%, reaching RMB74.930 billion. The bank’s total assets grew by 4.16% to RMB12,657.151 billion, with total loans and advances to customers increasing by 3.31%. However, the bank faced challenges with narrowing net interest margins and a slight decrease in non-interest income. Looking ahead, China Merchants Bank remains focused on enhancing its service quality and efficiency, aiming to maintain stable growth and continue its transformation initiatives in line with its strategic vision.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.