Core ideas:
Bank of Qingdao disclosed the third quarter report of 2023. In the first three quarters of 2023, revenue, PPOP and net profit from parent increased by 1.8%, 4.6% and 15.2% year-on-year, with a slight decrease compared with the first half of the year. In Q3, revenue, PPOP and net profit from parent increased by 0.5%, 4.4% and 13.3% year-on-year, and the growth rate of revenue and PPOP rebounded compared with Q2. In terms of accumulated performance drive in the first three quarters of 2023, provision provision, interest margin, scale growth and cost-income ratio are the main positive contributions, while non-interest and tax rates are the main negative contributions.
Highlights: (1) Steady growth in scale and optimization of asset and liability structure. At the loan end, the new loans in the first three quarters of 2023 were 28.5 billion yuan, an increase of 2.5 billion yuan on a year-on-year basis, mainly due to the increase of retail loans by 4.3 billion yuan, an increase of 5.7 billion yuan on a year-on-year basis. It is estimated that consumer loans are the main contribution. At the end of the third quarter, loans accounted for 53.1% of interest-bearing assets, up 0.48pct year-on-year. At the deposit end, 37.9 billion yuan of new deposits were added in the first three quarters of 23 years, an increase of 19.6 billion yuan on a year-on-year basis. It is expected that individual time deposits will still be added mainly, and the performance of corporate demand deposits is also good. At the end of the third quarter, deposits accounted for 69.38% of interest-bearing liabilities, up 2.24pct year-on-year. (2) The interest margin kept rising year-on-year. The accumulated interest margin in the first three quarters of 23 years was 1.84%, slightly lower than that in the first half year by 1bp and higher than that in the first half year by 8bp. It is expected that the yield of interest-bearing assets will be narrowed due to the downward adjustment of LPR quotation and the adjustment of interest rate of existing mortgage loans, and the cost ratio of interest-bearing liabilities will maintain a downward trend under the initiative cost control measures. (3) Asset quality is improving and the trend is good.
At the end of the third quarter of 2023, the non-performing rate continued to remain at 1.14%, the attention rate was 0.68%, which decreased by 7bp compared with the end of the first half year, and the provision coverage rate increased to 254.67%, further enhancing the risk offset ability, and the asset quality trend was good.
Attention: (1) The growth rate of middle income falls back. In the first three quarters of 23 years, the mid-term revenue increased by 6.9% year-on-year, the growth rate dropped by 5.60pct compared with the first half year, and the mid-term revenue of 23Q3 increased negatively year-on-year. Overall, wealth management business, wealth management, transaction banking and other business income is expected to continue a good growth trend, the first three quarters of revenue proportion still increased year-on-year. (2) Other non-interest rates continue to grow negatively. In the first three quarters of 23 years, other non-interest rates increased by 31.2% year-on-year, mainly because after the redemption of overseas preferred shares, the impact of exchange rate fluctuation on exchange gains and losses became significantly smaller, and exchange gains and losses decreased by 820 million yuan year-on-year. Excluding the influence of overseas preferred stock redemption factors, exchange gains and losses decreased by 144 million yuan year-on-year.
Earnings forecast and investment advice: interest margin rebounded year-on-year, bad + concern category continued to decline. It is estimated that the net profit growth rate of parent company in 23/24 will be 15.4%/15.9%, EPS will be 0.52/0.62 yuan/share, BVPS will be 5.49/6.00 yuan/share, and the closing price of A shares in the current period will correspond to PB of 0.6X/0.6X in 23/24 and PE of 6.5X/5.5X in 23/24. Keep the reasonable value of A shares unchanged at 4.92 yuan/share, corresponding to PB valuation of 0.9X in 23 years. According to the current AH premium ratio, the reasonable value of H shares is 2.89 Hong Kong dollars/share, and all of them are rated as "Buy".
Risk hints: (1) economic growth is falling faster than expected; (2) deposit costs are rising higher than expected; (3) international economic and financial risks are higher than expected; (4) policy regulation is stronger than expected.