Main points of investment
The growth rate of scale expansion rebounded + impairment savings and back-feeding driven net profit remained relatively stable. In the first three quarters of 2023, revenue and homing net profit were-3.2% and + 4.5% respectively compared with the same period last year. Q3 was-6.4% and + 3.6% in single quarter (+ 4.2% and + 8.4% in Q2, respectively). The growth rate of Q3 revenue turned negative and profit growth decreased slightly in the first three quarters of 2023 compared with the same period last year. The performance is mainly driven by the rebound of scale expansion growth rate and impairment savings. Specifically: 1) net interest income year-on-year-3.8% (Q3 quarter-year-on-year-3.7%), the scale accelerated expansion, mainly due to the downward spread drag on net interest income performance; 2) net fee income year-on-year-41.6% (Q3 quarter-year-on-year-42.1%), the decline expanded, other non-interest income year-on-year + 33.7% (Q3 quarter-on-year-0.4%), mainly due to the contribution of net investment income. 3) in terms of cost, the asset impairment loss is-26.4% compared with the same period last year, the credit cost is reduced to 0.89%, and the asset quality is stable and improving.
Give full play to Beijing's home advantage, scale expansion and growth rate rebounded. At the end of the third quarter of 2023, total assets were + 15.3% (first half + 13.5%) and loans + 13.9% (first half + 11.7%), giving full play to Beijing's home advantage and strong momentum in table expansion. In the first three quarters, new loans totaled 195.9 billion yuan, an increase of 112.9 billion yuan over the same period last year. From a structural point of view, RMB company loans (excluding discounts) increased by 152.4 billion yuan over the beginning of the year, contributing 78% of the loan increase; regionally, ② adhered to the strategic position of "serving the capital" and invested a total of 248.8 billion yuan in RMB loans (excluding discounts) to Beijing in the first three quarters. In terms of liabilities, deposits are + 10.6% year-on-year, and companies adhere to deposit banks, driving the growth of low-cost deposits by promoting the fine operation of customers, promoting product innovation and development, and strengthening cross-line business linkages. The average deposit interest rate of RMB companies has dropped by 11bp compared with the end of last year, further consolidating the low-cost advantage and, to a certain extent, hedging the negative impact of factors such as LPR downward and repricing on interest spreads.
The defect rate continued to decline, and asset quality entered the channel of improvement. The 2023Q3 non-performing rate is 1.33% from 1bp to 1.33%, and continues to decline from the 2020 high of 1.57%. The provision coverage ratio is from-2.4pct to 215%, year-on-year + 15pct, and loan ratio is from-5bp to 2.86%. The core indicators are stable and improving, and asset quality is gradually improving.
On the capital side, as of the end of 2023Q3, the core level I, level I and total capital adequacy ratios were 9.25%, 12.28% and 13.46%, respectively.
Earnings forecast and rating: we slightly adjust the company's EPS forecasts to 1.23 yuan and 1.30 yuan in 2023 and 2024, and expect net assets per share to be 11.87 yuan by the end of 2023. Based on the closing price on October 30, 2023, the PB at the end of 2023 is 0.38 times. Maintain the company's "overweight" rating.
Risk hint: asset quality fluctuates faster than expected, and the transformation is less than expected.