2020-11-28

Bank of Shanghai (601229): According to the estimated core trends of ROE recovery

Bank of Shanghai (601229): According to the estimated core trends of ROE recovery

Event: Bank of Shanghai disclosed its 2019 first quarter report.

In the first quarter, operating income reached 13 billion yuan, an increase of 42 in five years.

2%; net profit attributable to mother is 500,000 yuan, a year-on-year increase of 14.

1%, in line with expectations.

In the first quarter of 19, the NPL ratio increased by 5bps to 1 from 4Q18.

19%, provision coverage ratio decreased by 4 compared with 4Q18.

2 up to 328.

8%.

Non-interest-driven revenue growth hit another record high, and ROE opened a recovery channel.

In the first quarter of 19th, the operating income of Bank of Shanghai increased by 42% in ten years.

2%, which clearly exceeds comparable peers, which is expected to be the highest level for listed banks.

Non-interest income previously surged 92.

2%, we believe that the reclassification of interest income from interest-earning assets such as interbank wealth management to non-interest income after the main category conversion accounting standard 武汉夜生活网 IFRS9 is a driving effect.

Obviously, on this basis, the net interest margin of 1Q19 and net interest income are not comparable with the chain ratio. Taking into account the replacement of the asset distribution and the current wide and wide monetary environment, it is expected that the interest margin will be a small number of chain decreases.

Short-term growth of loans in the first quarter of 1923.

5%, its proportion further increased to 43%, and credit at the mercy focus more on high-yield consumer credit, by the end of 18 the proportion of consumer loans in retail loans has increased significantly to 56.

9%.

From the perspective of dividends, the growth rate of deposits has further increased, and deposits increased by 15 in the first quarter of 19.

3% of deposits accounted for 55 from the end of 18 years.

9% increased to 57.

5%.

Looking forward to the second half of the year, there is still room for optimization of the asset-liability structure, and the resource layout of developed regions with long-term improvements will be an insurmountable advantage for other comparable banks.Expected benefits.
It can be seen that the ROE of the Bank of Shanghai in 18 years and the first quarter of 19 continued to improve, which undoubtedly helped gradually increase and improve.

The non-performing ratio rebounded in the first quarter, and the short-term asset quality pressure is a common trend in the industry. It is not pessimistic about the future improvement of asset quality.

The Bank of Shanghai’s NPL ratio rebounded for two consecutive quarters, and the 1Q19 NPL ratio increased by 5bps to 1 quarter-on-quarter.

19%, it is estimated that the bad generation rate of write-off write-off is also increased by 49bps to 176bps from 4Q18.

In addition, the current level of provision of Bank of Shanghai is still sufficient, but the provision coverage ratio has decreased from the end of 18 in the case of quarterly incremental provisioning, which is another flaw in asset quality performance.

We believe that during the economic downturn, the general pressure on bank asset quality will be a common trend in the industry, and it is expected that some banks’ NPL ratios in 19 years will still fluctuate between quarters.

For the Bank of Shanghai, the non-performing ratio is not high, and most of them will not have a worsening of asset quality than the industry trend. For the consumer loan non-performing risks that investors generally concern about, the NPL ratio at the end of 18Is 0.

52%.

After the gradual release of non-performing risks in the first half of the year, the asset quality is expected to stabilize and improve in the second half of the year.

At the same time, the proportion of attention-oriented loans continued to decrease. In 1Q19, it decreased by 2bps to 1 compared with the end of 18 years.

84%. In the long run, deepening the credit layout of the Yangtze River Delta, Pearl River Delta and other developed economic circles is a huge advantage of Shanghai Bank, and it is an effective guarantee for improving asset quality.

Investment suggestion: There are not too many short-term short-term adverse rebounds, and Bank of Shanghai has not seen any increase in asset quality. The rebound of the exchange rate of fundamentally stable fundamentals will help restore the scale. The 18-year dividend rate will continue to increase.

Five shares have been raised to 29%.

The current Bank of Shanghai only corresponds to 0 in 19 years.

8 times PB, the net profit attributable to mothers is expected to increase by 17-20% in 2019-2021.

0%, 17.5% and 18% (maintaining the original forecast), maintain the buy rating and the leading bank’s first combination.

Risk reminder: adverse risks caused by economic substance.