China Merchants Bank Ltd

3968 CM BANK 38.3 -0.65 -1.67 930,970 23,766 China Merchants Bank target price raised to 46 hkd - ABN Amro ABN Amro on Wednesday increased its target price for China Merchants Bank to 46 Hong Kong dollars from 43 dollars as it expects the mainland lender to keep up its strong financial performance in the last quarter of 2007. The bank said on Monday that its January-September net profit grew 128 percent from a year earlier, buoyed by robust lending growth and non-interest income. The Shenzhen-based bank's net profit rose to 9.97 billion yuan, under Chinese accounting standards, from 4.37 billion yuan. Analysts were expecting net profit of 8.9 billion yuan. ABN Amro also increased its full-year earnings estimate by 7 percent to 13.22 billion yuan in view of the higher fee income and net interest income from a larger-than-expected increase in deposits by securities companies. The brokerage has a ""buy"" call on the stock. ""After our earnings revision, the nine-month result would equal 75 percent of our 2007 forecast. This looks conservative compared to the pattern in the past two years where China Merchants Bank pulled in a considerable fourth-quarter earnings,' ABN Amro analyst Simon Ho said in a research note. In 2005 and 2006, profit in the first nine months accounted for 65 percent of full-year earnings. China Merchants Bank's net interest income for the first nine months of 2007 rose 59 percent to 23.36 billion yuan. Net fee and commission income grew 154 percent to 4.39 billion yuan. Fee income for the third quarter made up 39 percent of the net fees received over the first nine months, putting to rest market concerns about the sustainability of this stream of income. Since the end of last year, the bank's deposits have increased 16 percent, outpacing loan growth of 12.1 percent and the industry's deposit growth rate of 13.5 percent. Shares of China Merchants were down 65 cents or 1.7 percent at 38.30 dollars at the end of the morning session Wednesday as investors locked in profits on Tuesday's 3.7 percent gain.