Changshu Bank (601128) Company Research: Micro-loan Recovers Demand Deposits and Bright Profitability Steadily Improves
Event: Changshu Bank announced the third quarter report, and the first three quarters achieved revenue of 47.
900 million (ten years +11.
86%), net profit attributable to mother 13.
700 million (+22.
4%), the non-performing rate at the end of September was 0.
96% (same as QoQ), provision coverage ratio increased by 13.
5pc to 467%.
The micro-loan business grew rapidly and customers steadily declined: 1) The size of micro-loans steadily increased: Q3 loan size increased by 3.9 billion, of which personal loans increased by 3.8 billion, and operating loans increased by 20.
400 million, the proportion of total loans steadily increased to 33.
52%; 2) The number of micro-credit customers increased rapidly, and at the end of September, there were about 25 customers with credit lines below 1 million.
70,000 households, a steady increase from the end of June 1.
60,000 households; 3) The customer structure continued to sink. Among the 3.9 billion loans increased in Q3, more than 50 million loans for public loans decreased by 1.6 billion, while micro loans under 1 million increased by 2.3 billion, and continued to be “small and micro”.
Performance growth accelerated, and profitability steadily increased.
1) Performance growth angle: Q3 single quarter revenue, PPOP, and net profit attributable to mothers increased by 8 respectively.
82%, an increase of 0 from the second quarter.
04 tablets, 2.
2 and 7
0pc, performance growth steadily accelerated.
2) Net interest margin angle: Measured from the average caliber at the beginning and end of the period, the Q3 single quarter interest margin increased significantly by 13bps from Q2.
It is expected that the proportion of personal business loans (micro-loans) with higher yields on the asset side will increase steadily, while the cost of resistance will also decrease.1.2 billion (+7 chain.
3) Capital return perspective: ROE in the first three quarters was 12.
27%, it is estimated that after excluding the conversion of convertible bonds, the ROE is increased to 13.
52%, increasing by 0 every year.
In the medium and long term, the ROE of Changshu Bank will continue to rise steadily through the steady increase 南京夜网 in the proportion of micro-loan business.
The quality of assets is excellent. Provisions naturally release profits, and the provision coverage ratio is as high as 467%.
At the end of September, the non-performing rate was flat at 0 from Q2.
At 96% level, the balance and proportion of focus loans (1.
63%) continued to maintain a “double down” trend.
In the case of excellent asset quality and continuous improvement, Changshu Bank realized a “provision of natural release of profits”. In the third quarter, the provision in the single quarter was even reduced by 15%.0.
11pc up to 467%, 4.
Asset-liability structure: The proportion of loans increased steadily, and demand deposits grew brightly.
1) Assets: Total assets increased by 1 in the third quarter.
48%, of which, under the circumstances of the development of micro-loan business, loans increased by 3.9 billion (+3).
8%), its proportion in total assets steadily increased to 58%.
2) Debt side: deposits increased by 17 in the first half of the year.
In the case of 2%, Q3 deposits increased steadily by 1%, of which demand deposits increased by 2.2 billion (+4).
9%), effectively reducing the comprehensive cost of liabilities.
Interbank certificates of deposit + interbank debt surplus was 20.3 billion, accounting for only 12% of total liabilities.
Investment suggestion: The overall performance of the third quarterly report of Changshu Bank is dazzling, the growth rate of performance has steadily increased, the micro-loan business has steadily developed, the asset quality has continued to improve, the core resistance advantage has been continuously reflected, and various indicators are leading the industry.
In the medium to long term, Changshu Bank’s micro-loan business system is mature. It is expected that the city’s proportion will continue to increase in the future, and it will gradually develop into a regional micro-loan business with a prominent investment value. At present, its 2019 and 2020 PB are only 1.
32 times, there is room for contradictive improvement in the future evaluation, and maintain the “Buy” rating.
Risk warnings: micro-loan investment is less than expected; the lifting of the ban on restricted stocks has brought about changes; the macro economy has exceeded expectations for a long time, and interest rate marketization has advanced beyond expectations.