This report is read as follows:
Ping an Bank reported lower-than-expected revenue growth in the third quarter of 2023, and its performance was under pressure periodically, lowering its target price to 13.5 yuan per share to maintain its overweight rating.
Main points of investment:
The performance of Ping an Bank is under pressure periodically due to the macroeconomic situation, the weaker-than-expected recovery in retail demand, the decline in its own risk appetite and the base figure of last year. At present, it is important to consolidate the business foundation and prepare for the follow-up demand recovery, and we are still optimistic about the medium-and long-term development prospects and investment value of Ping an Bank. Adjusted net profit growth rates for 2023-2025 are expected to be 9.2%, 14.9% and 15.2%. Corresponding to EPS 2.41,2.8,3.24 (- 0.28) yuan per share, the target price was lowered to 13.5 yuan, corresponding to 0.65 times PB in 2023.
Revenue growth was lower than expected. Q3 revenue is-15.5% year-on-year, and the scale, interest spread and non-interest rate are all dragged down: the growth rate of ① loans has declined, which is speculated to be mainly due to the early release of credit reserves and the sluggish demand for Q3; the month-on-month and year-on-year decline in ② spreads have expanded, mainly due to a significant decline in retail loan yields, which is related to weak retail demand and active risk reduction. Other non-interest income of ③ fell sharply compared with the same period last year, mainly due to the higher profit and loss base of fair value changes in the same period last year.
The impairment of Q3 is-28.1% compared with the same period last year, and the growth rate of net profit is-2.2% year-on-year.
The bad rate of Q3 rose slightly to 1.04% month-on-month, mainly due to the slight acceleration of bad generation, mainly due to the increase in the bad rate of ① Q3 to public real estate 46bp, which is consistent with the industry, but the absolute level is still significantly lower than that of the same industry; the bad rate of ② Q3 new loan has increased 36bp, and the consumer credit risk is still being exposed. Affected by a slight increase in the defect rate and a decline in credit costs, the provision coverage rate fell by 9pc to 283 per cent. The attention rate and overdue rate increased slightly, but the range was controllable.
Risk tip: demand repair is lower than expected.