Investment points: bank of Shanghai 22H1 homing net profit increased 3.23% year-on-year, revenue increased 0.86% year-on-year. The company takes pension finance as the key point of retail strategy, pays close attention to loans in the areas of inclusive benefits, green, manufacturing and other areas, Li Caizi officially operates, and wealth management income goes against the trend to achieve year-on-year growth. The 22H1 defect rate and provision coverage remained stable, the overdue rate dropped significantly, and we maintained an "better than the market" rating.
Inclusive finance and green financial loans have increased, and real estate related risks have been reduced. The company's main loan increase came from its public business. 22H1 paid close attention to inclusive loans and green loans, which increased by 21.70% and 96.93% respectively over the end of 21 years. The company's real estate exposure has been relatively reduced, and credit risk has been effectively dealt with. The proportion of 22H1 loans to public real estate loans has been reduced by 2.11pct to 10.64% compared with the end of 21 years, and the bad rate to the public real estate industry has been reduced by 16bps to 2.89% compared with the end of 21 years.
Interbank business and retail deposits reduce debt-side costs. 22H1 personal demand deposits increased by 21.79% compared with the end of 21 years, the proportion of personal deposits increased 2.02pct, and the interest payment rate of personal deposits decreased 1bp compared with the end of 21 years.
The average interest payment rate of deposits and loans of 22H1 interbank and other financial institutions was 2.13%, down 12 bps from 21 years, while the average interest payment rate of financial assets sold and repurchased was 1.32%, down 23bps from 21 years. Combined with the above factors, the cost ratio of interest-bearing liabilities of the company is lower than that of 21 years (4bps).
Under the pressure of the epidemic, the asset quality remained stable, and the overdue rate decreased significantly. The non-performing loan ratio at the end of 22Q2 of the Bank of Shanghai is 1.25%, and the provision coverage rate is 302.24%, which is basically the same as that of 22Q1. The overdue rate is 1.86%, which is 22 bps lower than that at the end of 21 years. Among them, the proportion of overdue loans is 0.47%, which is lower than that at the end of 21. 23bps.
The proportion of restructured loans was 0.08%, down 7bps from the end of the 21st century. Although inevitably affected by the epidemic in Shanghai, the company has put in place control over the quality of loans, and the proportion of newly generated overdue loans has declined. The bad loan rate of 22Q2 in Shanghai was 1.47%, which was lower than that at the end of the 21st century by 11bps. The company believes that the rate of non-performing retail loans will gradually stabilize in the second half of 22 years.
Investment advice. The overdue rate of the Bank of Shanghai has declined, and the asset quality under the impact of the epidemic is basically stable. we predict that the EPS from 2022 to 2024 will be 1.58,1.72,1.89 yuan, and the growth rate of net profit will be 6.60%, 8.50% and 9.41%. According to the DDM model (see Table 2), we get the reasonable value of RMB 8.94.According to the comparable valuation method, the 2022E PB of the company is valued at 0.70x (0.66x of the comparable company), and the corresponding reasonable value is RMB 9.94RMB. Therefore, the reasonable value range is 8.94-9.94 yuan (corresponding to PE 5.66-6.29 times in 2022, and 4.68 times corresponding to PE in the same industry), maintaining a "better than the market" rating.
Risk hints: the solvency of enterprises has declined, asset quality has deteriorated significantly, and major changes have taken place in financial regulatory policies.