20130823-DBS_Group-China_Merchants_Bank_Rights_terms_are_in_line_11页_251kb

报告摘要

DBS Group Research Summary: China Merchants Bank (CMB)

Core Content

This report from DBS Group Research provides an analysis of China Merchants Bank (CMB), focusing on its financial performance, capital raising activities, and valuation. The report highlights the bank's position in the Chinese banking sector, its recent financials, and the impact of its rights issue on its capital structure and earnings.

Main Points

Recommendation: BUY with a 12-month target price of HK$19.00.
Rights Issue Details: CMB is launching a rights issue of 1.74 shares for every 10 existing shares at a price of Rmb9.29 or HK$11.68 per share. The offer is expected to raise Rmb34.88bn if fully subscribed.
Impact of Rights Issue: The rights issue is expected to boost the core Capital Adequacy Ratio (CAR) by 139bps, but will dilute earnings and Return on Equity (ROE) by 13%. Post-rights ROE is projected to remain high at 18-21% for 2013-2015.
Pricing Analysis: The rights price is at FY12 book value, implying a 15% discount to A-shares and a 17.6% discount to H-shares. This is in line with previous predictions.
Dividend Discount Model (DDM): The target price of HK$19.00 includes HK$1.1 for the value of H-share rights. It is based on projected earnings and a discount rate of 13.5%.
Valuation Metrics: The bank's P/BV ratio is expected to decline from 1.32 in FY13F to 0.8 in FY15F. The dividend yield is projected to increase from 5.2% in 2013 to 6.6% in 2015.
Earnings and Profitability: Earnings per share (EPS) are expected to grow from HK$2.66 in 2013 to HK$3.14 in 2015. ROE is projected to decline from 20.8% in 2013 to 18.6% in 2015.
Capital Structure: The bank's H-shares make up 18% of total issued capital, with a market cap of HK$305,956m. The bank has a high proportion of free float (100%).
Comparative Analysis: CMB is ranked among the top H-share banks in terms of earnings growth and profitability, though it is less favored compared to peers due to higher exposure to overcapacity industries and WMPs.

Key Financials and Forecasts

Earnings and Profitability

EPS (HK$): Expected to grow from 2.66 in 2013 to 3.14 in 2015.
ROE (%): Projected to decrease from 20.8% in 2013 to 18.6% in 2015.
Net Profit (RMB m): Expected to grow from 49,008 in 2013 to 62,531 in 2015.
Pretax Profit (RMB m): Expected to increase from 64,765 in 2013 to 82,241 in 2015.

Capital Adequacy

Core CAR (%): Expected to increase from 8.0% in 2Q13 to 10.2% in 2015.
Total CAR (%): Projected to rise from 11.4% in 2012 to 12.8% in 2015.

Dividend and Yield

DPS (HK$): Projected to increase from 0.84 in 2013 to 0.94 in 2015.
Dividend Yield (%): Expected to grow from 5.2% in 2013 to 6.6% in 2015.

Asset Quality

NPL Ratio (%): Projected to rise from 0.61 in 2012 to 1.26 in 2015.
NPL Provision Coverage: Expected to decline from 351.8 in 2012 to 201.6 in 2015.

Catalysts and Outlook

Positive Catalysts: Improving macro environment, faster asset securitization, and completion of the rights issue.
Valuation: The DDM-based target price of HK$19.00 is based on the bank's projected book value and ROE.
Market Position: CMB is considered one of the top H-share banks, with a strong capital base and expected to benefit from the rights issue.

Peer Comparison

ROE (%): CMB's ROE is lower than peers like ICBC and CCB but higher than ABC and BoCom.
P/BV (X): CMB's P/BV is higher than most peers, indicating potential undervaluation.
Dividend Yield (%): CMB's dividend yield is among the highest in the sector.
Earnings Growth: CMB's EPS growth is expected to be in line with industry peers.

Conclusion

The report concludes that the rights issue is a positive move for CMB, as it will enhance its capital adequacy without significantly impacting its earnings. The bank's financial performance is expected to remain strong, with EPS growth and a rising dividend yield. Despite a slight dilution in ROE, the overall outlook remains positive, leading to a BUY recommendation.

展开完整摘要