HK Stock Market Move | China Merchants Bank (03968) rose more than 3% after performance report, with a continuous narrowing decline in revenue for 24 years. Profit growth rate returned to positive.

China Merchants Bank (03968) rose by more than 3% after its performance announcement. As of the press release, it rose by 3.13% to 41.15 Hong Kong dollars, with a turnover of 173 million Hong Kong dollars. On the news front, on January 14th, China Merchants Bank released its performance report for 2024. The group achieved an operating income of 337.537 billion yuan (the same below), a decrease of 15.86 billion yuan compared to the previous year, a decrease of 0.47%; total profit was 178.652 billion yuan, an increase of 20.34 billion yuan compared to the previous year, an increase of 1.15%; net profit attributable to shareholders of the bank was 148.391 billion yuan, an increase of 17.89 billion yuan compared to the previous year, an increase of 1.22%. As of December 31, 2024, the total assets of the group were 12.152 trillion yuan, an increase of 1.1235 trillion yuan compared to the end of the previous year, an increase of 10.19%; total liabilities were 10.9185 trillion yuan, an increase of 975.771 billion yuan compared to the end of the previous year, an increase of 9.81%; the non-performing loan ratio was 0.95%, the same as the end of the previous year; the provision coverage ratio was 411.98%, a decrease of 25.72 percentage points compared to the end of the previous year; the loan provision ratio was 3.92%, a decrease of 0.22 percentage points compared to the end of the previous year. China Securities Co., Ltd. believes that the narrowing decline in revenue and the rebound in profit growth of China Merchants Bank in 2024 exceeded expectations. Asset size and deposit size both saw double-digit growth. Asset quality remains steady, with a slight release of provisions contributing to profit. Looking ahead to 2025, retail demand is expected to pick up, credit growth may improve, interest rate pressure persists but may be better than in 2024. Despite stable non-interest income, it is expected that revenue will continue to improve slightly in 2025, profit will continue to grow positively, and ROE will continue to lead the industry. Currently, with the investment theme of high dividend yield, China Merchants Bank has a high and solid dividend yield, very low dilution risk from further refinancing, and is a well-balanced variety with both high dividend and business cycle attributes, highlighting its value in allocation.