0524 GMT - The pressure on China Merchants Bank's earnings growth could persist into 2024 amid China's economic slowdown and a prolonged margin squeeze, UOB Kay Hian analysts say in a research note. They expect the company's 4Q net profit to drop 7.6% on year on net interest margin compression and weak fee gains. The bank's NIM could slip 4 bps on quarter to 2.07%, weighed by Beijing's existing mortgage-rate cuts, the analysts say. UOB Kay Hian cuts 2024 and 2025 earnings forecasts for the lender by 5.3% and 5.5%, respectively, as CMB doesn't expect the NIM compression to reach a trough before 2025. The brokerage maintains a buy call on the stock but lowers its H share target to HK$40.00 from HK$45.00. Shares are last at HK$26.20. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
January 15, 2024 00:25 ET (05:25 GMT)
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