CCB's net profit for the first three quarters of 2023 increased 3.1% year on year, profit growth slowed, revenue fell 1.3% year on year, interest income increased negatively year on year, handling fees remained flat, and other non-interest rates increased rapidly, which was quite positive.
The company's profitability is the best, and the external environment is weak. Financial performance still highlights the company's strong business resilience and strong competitiveness. The company 2023PB0.53X has a dividend ratio of 6.34%, low valuation, high dividends, and maintains an increase in holdings rating.
Key points to support ratings
Profit and revenue have slowed slightly
CCB's net profit for the first three quarters increased 3.1% year on year. The growth rate was slightly down 0.4 percentage points from the second quarter. ROAE was 12.05%, down 75 bps year on year. Revenue fell 1.3% year over year, an increase in decline compared to the second quarter. The marginal pressure on the revenue side was self-interest income. Handling fees remained flat year on year, and other non-interest income improved. Net interest income for the first 3 quarters fell 3.1% year on year, and net interest income for the 3rd quarter fell 5.6% year on year. Under policy and demand pressure, interest spread pressure continued. Other non-interest income increased 40.0% year on year, and investment-related income improved.
Interest spreads continue their downward trend, and the pressure may come from the debt side
Under the combined influence of steady growth and concession policies, repricing, and deposit regularization, CCB's net interest income for the first 3 quarters fell 3.1% year on year, net interest spread for the first 3 quarters was 1.75%, down 30bp year on year (not considering restating), asset-side yield declined, debt-side costs rose, concessionary and demand suppressed assets, regular suppression of deposits, and estimated the quarterly net interest difference of 1.68%, down 5 bps from month to month. The yield on interest-bearing assets was 3.43%, flat month-on-month, and interest-bearing debt cost ratio was 1.9%, up 7 b3% month-on-month p, the pressure or more comes from the debt side.
Other non-interest rate growth, stable handling fees
CCB's non-interest income in the first three quarters increased 6.4% year on year. Looking at the split, net profit and loss from other non-interest rate changes in fair value, net exchange profit and loss, and investment income all contributed positively, driving other non-interest rate increases of 40.0% year over year, and the growth rate accelerated. The growth rate increased by 135.8% year on year in the third quarter. Company fees in the first three quarters remained the same year on year as in the same period last year. Fees for bank cards, agency services, and settlement and clearing continued to grow; asset management business revenue declined year on year. Under market pressure and fee concessions, the company's handling fees remained flat, demonstrating CCB's solid business foundation and strength.
The scale growth rate declined slightly and remained high
At the end of the third quarter, CCB's total assets, loans, and deposits increased by 10.3%, 13.1%, and 12.4%, respectively. They were all slightly slower than the previous quarter, and are still at a high level.
Asset quality is stable, and there are fewer provisions to feed back profits
CCB's non-performing rate for the 3rd quarter was 1.37%, flat month-on-month. The non-performing loan balance increased 2% month-on-month, and the estimated single-quarter bad generation rate was 0.39%, down 2 bps from month to month.
The company made provisions to reduce contribution profits in the first three quarters, and asset impairment losses fell 12.1% year over year. Stock provisions were stable. The provision coverage rate for the third quarter was 243.31%, down 1.2 percentage points from the previous quarter, and the loan ratio was 3.32%, down 2 bps from the previous quarter.
valuations
According to the company's three-quarter report, we lowered our profit forecast. The 2023/2024/2025 EPS is 1.30/1.34/1.46 yuan. The current stock price corresponding to 2023/2024 PB is 0.53x/0.47x, maintaining an increase in holdings rating.
The main risks faced by ratings
As a result of the economic downturn, asset quality deteriorated beyond expectations, and financial regulation exceeded expectations.