Event: the company released three quarterly reports, with operating income of 18.75 billion (year-on-year + 8.4%) and net profit of 5.85 billion (year-on-year + 9.2%) in the first three quarters, with a defect rate of 1.16%, unchanged from the previous quarter.
Performance: overall decline, in line with the trend of the industry.
The net profit of homing in the first three quarters was + 9.2% compared with the same period last year, which was lower than that of the medium report (1.4pc). Revenue grew by 8.4% year-on-year, a decrease of 3.7pc compared with the medium report. Specifically:
1) net interest income: + 14.6% compared with the same period last year, the growth rate is lower than that reported in China (2.2pc). According to the data at the beginning and end of the period, the net interest margin is basically stable than the interim report, but due to the rising base in the second half of last year (6bps), it is expected to decline slightly from the same period a year earlier. In addition, a decline in scale growth is a drag on net interest income performance, which may be related to weak retail demand.
2) non-interest income: non-interest income reached 3.72 billion yuan in the first three quarters, down 460 million yuan from the same period last year. Of this total, the net income from fees and commissions was 1.33 billion yuan, down to 27% over the same period last year, but still maintained a high level in the same industry. In addition, other non-interest income was 2.39 billion yuan, down 23.6% from the same period last year, which was enlarged, mainly due to the weak performance of the bond market in the three quarters and exchange rate fluctuations affecting changes in fair value and weak net exchange earnings.
Scale: total assets exceed trillion yuan.
At the end of September, the total assets exceeded trillion yuan, close to 1.02 trillion yuan, a year-on-year growth rate of 15.8%.
The loan size was 488.1 billion yuan, the year-on-year growth rate dropped to 15.2%. It is expected that retail demand is still a relatively weak drag. Deposits totaled 632.7 billion yuan, an increase of 14.1% over the same period last year.
Asset quality: the trend is stable.
At the end of September, the defect rate was 1.16%, the month-on-month rate was the same, and the attention rate decreased to 1.63% from the previous month. The provision coverage rate is 311%, and the loan ratio is 3.61%, which is basically stable.
Investment advice: in the short term, although the company's performance declined in the third quarter, it is expected that revenue growth will remain at a leading level in the industry. In the medium and long term, Changsha Bank, as the largest city commercial bank in Hunan Province, is rooted in the mainland. With the economic restoration and local regional development, it is expected that there is still a broad space for public, county, retail and other businesses. At present, the stock price is only 0.52x corresponding to its 2023PB, maintaining a "buy" rating.
Risk tips: macroeconomic downturn; competition in small and micro businesses is higher than expected; consumption recovery is not as expected.