Goldman Sachs: China Merchants Bank (03968) met expectations for last year's performance, target price raised to HK$53.44

Goldman Sachs released a research report stating that China Merchants Bank (03968) offers a higher dividend yield and better earnings per share growth. Therefore, Goldman Sachs maintains its "buy" rating and slightly raises the H-share target price from HK$53.41 to HK$53.44, and the A-share target price for China Merchants Bank (600036.SH) from RMB 54.68 to RMB 54.71. The bank stated that China Merchants Bank has announced its preliminary performance for last year, with revenue and net profit of RMB 338 billion and RMB 150 billion respectively, indicating RMB 86 billion and RMB 36 billion for the fourth quarter of 2025. This translates to a 1% and 3% increase in net profit for the full year and the fourth quarter of 2025, roughly in line with the bank's forecast for the four major banks. However, the bank's forecast for China Merchants Bank's revenue and net profit in 2026 are RMB 355 billion and RMB 163 billion respectively, which are 3% and 5% higher than the Bloomberg market consensus, equivalent to a year-on-year growth of 7% and 8%, compared to an average growth of 5% and 3% for the four major banks. As discussed in previous reports, the bank expects 2026 to be a moment when China Merchants Bank's net profit growth trajectory diverges from the four major banks, mainly due to the expectation that China Merchants Bank is unlikely to significantly increase provisions, thereby accelerating profit growth under strong revenue momentum.