China Merchants Bank (600036.SH) Hot Analysis: Divergence Between Stock Price Performance and Financial Results

China Merchants Bank (600036.SH) has recently become a market hot stock with strong price performance: it has risen 33.75% year-to-date and delivered a 46.72% 1-year return, significantly outperforming the Shanghai Composite Index’s 17.18% gain [0]. However, its Q3 results fell short of expectations: net profit of RMB 113.772 billion was below market expectations, and the non-performing loan (NPL) ratio rose from 0.9326% to 0.9448% [0]. Strategically, CMB Financial Investment has been approved to commence operations, indicating efforts towards business diversification [0]. In terms of valuation, the P/E ratio ranges from 7.61x to 7.65x, P/B ratio from 0.88x to 0.9x, and dividend yield is 4.22%, which is relatively reasonable [0].

1. Divergence Between Stock Price and Fundamentals
   : Despite the excellent stock price performance, Q3 results are under pressure, reflecting the coexistence of market confidence in its long-term strategy and short-term fundamental challenges.
2. Impact of Strategic Adjustments
   : The opening of CMB Financial Investment may provide new growth drivers for the future, but short-term results are still affected by the industry environment.
3. Solid Industry Position
   : As a leading joint-stock bank with a market capitalization of HK$1.21 trillion, it still needs to address narrowing net interest margin and intensified competition.

• NPL ratio increased to 0.9448%, leading to greater asset quality pressure [0]
• Sustained narrowing of net interest margin and intensified competition
• Intensified competition making it harder to maintain market share

• Business diversification (e.g., CMB Financial Investment) may provide new growth drivers for the future [0]
• Stable dividend yield (4.22%) attracts long-term investors [0]
• Analysts’ average target price is HK$55.78, implying a 7.67% upside potential [0]

China Merchants Bank’s stock price has performed strongly, but short-term results face pressure. Strategic adjustments are worth attention, with reasonable valuation and stable dividends. Investors need to balance stock price performance with fundamental changes, and monitor industry dynamics and the company’s strategic execution effectiveness.