Core ideas:
Changsha Bank disclosed that in the third quarter of 2023, Q1-3 revenue, PPOP and homing net profit in 23 years increased by 8.4%, 10.0% and 9.2% compared with the same period last year, while revenue, PPOP and homing net profit increased by 1.6%, 2.8% and 6.4% respectively compared with Q2. The growth rate of revenue, PPOP and homing net profit was slower than that of Q2. The growth rate of the company's home net profit is in line with investors' expectations, while revenue growth is slightly lower than expected by other non-interest income. Investors should pay attention to: (1) the sharp slowdown in revenue growth is mainly due to the one-off effect of other non-interest income from a higher year-on-year base. Other non-interest income of 23Q1-3 was 2.39 billion yuan, a decrease of 23.6% (vs.23H1:-17.9%) over the same period last year, of which the fair value change decreased by 450 million yuan compared with the same period last year, and the exchange profit and loss decreased by 380 million yuan compared with the same period last year. (2) the growth rate of the provision slows down, and the impairment loss of Q3 is 2.09 billion yuan, an increase of 4.8% over the same period last year (vs.23Q2:+10.3%). (3) the growth rate of net profit of Q3 (6.4%) is much higher than that of net profit (3.0%), which is just the opposite of Q2, which may be caused by the slowdown of the net profit of Changyin 58, a subsidiary of consumer finance.
The net interest margin is expected to change little. The company estimates that the net interest margin of 23Q1-3 is 2.36%, which is up 1BP from 23H1 and down 3BP from the same period last year. From a marginal point of view, the measured asset-end yield rose to 4.69% (up 2BP from the previous month), which was narrower than that of 23Q2. The cost ratio of interest-bearing liabilities rose slightly to 2.25% (2BP), which was also narrower than that of 23Q2. Judging from the changes in the structure of interest-bearing liabilities, Q3 interest-bearing liabilities increased by 17 billion yuan month-on-month, of which deposits with lower costs accounted for 99.2% of the increment, and interbank deposits accounted for 86.9%, which may be the main reason for the small increase in debt costs.
The quality of assets remains stable. The non-performing loan ratio was 1.16% at the end of September, the fourth consecutive quarter unchanged from the previous quarter; the focused loan ratio was 1.63%, down 1BP from the end of June. 23Q1-3 estimates that the net bad generation rate is 1.49%, a slight increase in 4BP compared with the same period last year. At the end of September, the provision coverage rate was 311%, which was lower than that at the end of June by 1.8PCT. At the end of June, the core tier one capital adequacy ratio was 9.33%, down 0.16PCT from a year earlier and rising 0.17PCT from a month earlier.
Profit forecast and investment suggestions: the ownership structure is straightened out, the retail potential is released, and the room for upward valuation is opened. It is estimated that the growth rate of homed net profit for 23xx in 24 years is 10.1%, 10.8%, 1.79 and 16.83 yuan per share, respectively, and BVPS is 16.83 yuan per share, respectively. The closing price corresponds to 0.5X/0.5X in 23 / 24, and 4.4X/3.9X to 24-year PE in 23max. Considering that the company benefits from the active consumer market in Hunan, the reasonable valuation of PB in 24 years is 0.6X, with a "buy" rating corresponding to a reasonable value of 10.10 yuan per share.
Risk hints: (1) the macroeconomic decline is higher than expected, and the asset quality deteriorates significantly. (2) the recovery of consumption is not as expected, and the fixed deposit is serious. (3) the market interest rate goes up and the trading book loses money.