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China Merchants Bank Co., Ltd. (600036.SS)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$324.57 - $1,171.04$1,033.06
Multi-Stage$149.04 - $163.04$155.91
Blended Fair Value$594.49
Current Price$45.95
Upside1,193.77%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS16.86%13.47%2.191.921.731.411.271.010.910.740.690.67
YoY Growth--14.31%10.93%23.02%10.51%26.44%11.09%22.40%7.25%2.99%8.06%
Dividend Yield--5.06%5.88%5.04%3.00%2.49%3.12%2.66%2.54%3.59%4.16%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)148,578.00
(-) Cash Dividends Paid (M)58,000.00
(=) Cash Retained (M)90,578.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)29,715.6018,572.2511,143.35
Cash Retained (M)90,578.0090,578.0090,578.00
(-) Cash Required (M)-29,715.60-18,572.25-11,143.35
(=) Excess Retained (M)60,862.4072,005.7579,434.65
(/) Shares Outstanding (M)25,232.7125,232.7125,232.71
(=) Excess Retained per Share2.412.853.15
LTM Dividend per Share2.302.302.30
(+) Excess Retained per Share2.412.853.15
(=) Adjusted Dividend4.715.155.45
WACC / Discount Rate7.03%7.03%7.03%
Growth Rate5.50%6.50%7.50%
Fair Value$324.57$1,033.06$1,171.04
Upside / Downside606.36%2,148.24%2,448.50%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)148,578.00158,235.57168,520.88179,474.74191,140.60203,564.74209,671.68
Payout Ratio39.04%49.23%59.42%69.61%79.81%90.00%92.50%
Projected Dividends (M)58,000.0077,898.40100,138.55124,940.79152,544.24183,208.26193,946.30

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate7.03%7.03%7.03%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)72,097.6672,781.0573,464.44
Year 2 PV (M)85,780.1087,413.9789,063.26
Year 3 PV (M)99,056.32101,899.87104,797.32
Year 4 PV (M)111,935.12116,239.83120,667.52
Year 5 PV (M)124,425.18130,434.96136,674.75
PV of Terminal Value (M)3,267,497.643,425,319.003,589,180.55
Equity Value (M)3,760,792.023,934,088.694,113,847.85
Shares Outstanding (M)25,232.7125,232.7125,232.71
Fair Value$149.04$155.91$163.04
Upside / Downside224.36%239.31%254.81%

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