Goldman Sachs: China Merchants Bank's performance last year met expectations; target price raised to HK$53.44

Goldman Sachs releases a research report stating that China Merchants Bank (03968) offers high dividend yields and better per-share dividend growth. Therefore, Goldman Sachs maintains its “Buy” rating and slightly raises the H-share target price from HKD 53.41 to HKD 53.44, while the A-share target price for China Merchants Bank (600036.SH) is increased from RMB 54.68 to RMB 54.71.

The bank states that China Merchants Bank has announced its preliminary results for last year, with revenues of RMB 338 billion and net profit of RMB 150 billion, implying that in Q4 2025, revenues will be RMB 86 billion and net profit RMB 36 billion. This represents a 1% increase in full-year net profit and a 3% increase in Q4 net profit for 2025, roughly in line with the bank’s forecasts for the four major banks.

However, the bank’s forecasts 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% above Bloomberg consensus, corresponding to year-over-year growth of 7% and 8%, compared to the average growth of 5% and 3% for the four major banks. As discussed in previous reports, the bank expects 2026 to be a turning point where China Merchants Bank’s profit growth trajectory diverges from that of the four major banks, mainly because it is unlikely that the bank will significantly increase provisions, thus accelerating profit growth amid strong revenue momentum.

(Edited by: Guo Jiandong)

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