JP Morgan: "Overweight" rating on China Merchants Bank (03968) with a target price of HK$53.

J.P. Morgan published a research report stating that China Merchants Bank (03968) has been given a "overweight" rating with a target price of HK$53. The report mentioned that China Merchants Bank released its third-quarter performance report, which surpassed expectations with a strong performance. Operating profit increased by 8% year-on-year, reversing the 1% decline in the first three quarters of last year, exceeding J.P. Morgan's and market expectations by 5% and 8% respectively. Quarterly operating income also increased by 8% year-on-year, reaching 84.8 billion RMB, exceeding the bank's forecast by 4%. Net interest income was in line with expectations, while non-interest net income performed well and was the main driver of revenue growth. J.P. Morgan expects that the stock price of China Merchants Bank will positively respond. J.P. Morgan believes that China Merchants Bank is the best-performing retail bank among Chinese banks. In the first half of last year, the retail deposit level per branch was significantly higher than other industry peers, and its deposit costs were also the lowest among joint-stock banks and urban commercial banks. It is expected to be an advantage in an environment where deposit interest rates are liberalized.