Daiwa: Initiates China Merchants Bank (03968) with "Outperform" Rating, Target Price HK$56.3

Daiwa released a research report initiating coverage on China Merchants Bank (03968) with an "Outperform" rating and a target price of HK$56.3, believing that a fee income inflection point will reshape its earnings advantage. The bank noted that CMB's fee income fell 23% cumulatively from 2021 to 2024, mainly due to regulatory adjustments rather than franchise erosion, but a recovery has already begun, with net fee income growing 4% in 2025 and up 6% year-on-year in the first half of 2026. The bank forecasts net fee income growth of 8% to 8.4% from 2026 to 2028, while expecting operating revenue to grow 6% to 7% year-on-year and net profit to grow 6% to 8% year-on-year over the same period.