Changshu Bank (601128): Grain and grass rich development

Changshu Bank (601128): A large number of grain and grass development

The performance of investment points continued the high growth trend in the first half of the year, with 成都桑拿网 Q3 profit growth accelerating.

The company’s net profit in the first three quarters increased by 22 per year.

4%, of which 3Q19 profit growth rate is higher than the previous + 6pct (3Q19: 26.

3%, 1H19: 20.

2%), the margin of profit growth accelerated.

The main driver of 9M19 profit growth came from the growth of interest-generating assets7.

9%, investment income increased by 76% in the short term, and the relative savings in impairment losses also made a positive contribution to performance.

The accelerating profit growth in Q3 was mainly caused by the increase in income in 3Q19 by more than 30%, and the impairment loss was saved by up to 15%.

The asset structure was further optimized, and the market sinking strategy continued to advance.

9M19 Changshu Bank’s asset scale grew steadily (YTD +7.

0%), the asset structure of benefit reduction standards was further optimized, and loans exceeded the 100 billion mark, accounting for +4 of the total assets.

5 points to 57.

7%.

Loans were put on the market. In the first half of the year, the company’s investment in public investment increased, but since the third quarter, the company has increased its retail investment.

In terms of debt, the growth of deposits is good, and savings deposits are growing better than corporate deposits. Savings deposits at the end of the period accounted for + 3pct to 58% compared to the beginning of the year.

The good growth of deposits provided the company with the conditions to reduce the cost of high-cost interbank certificates of deposit. Overlapping companies’ convertible bonds were converted into shares and redeemed, and 9M19 bond debt decreased by approximately 11 billion.

In terms of pricing, the interest margin (caliber at the beginning and end of the period) 3.

29%, flat for one year, 6bps wider than the previous quarter.

The widening interest margin was mainly due to the increase in the proportion of high-priced retail, especially personal operating loans, which led to an increase in the yield of interest-earning assets.

From the perspective of the net interest margin (single quarterly annualized) caliber, the Q3 interest margin changed Q1 and Q2’s continued downward trend, and rose 13bps to 3 from Q2.

35%.

The asset quality is stable and improving, and the provision is prominently thickened.

Judging from the main indicators, the company’s asset quality is stable and the provisioning level scale can be compared with the industry’s safety pad with a transmission. In the future, the credit cost will also be relatively stable due to the reduction to the rate of generation, and the savings from impairment will increase profitsProvide sufficient positive contributions.

In terms of capital, Changshu’s convertible bonds successfully completed the conversion, which further consolidated the company’s capital and effectively supported the company’s future expansion. 杭州桑拿 The capital adequacy ratio and core tier 1 capital adequacy ratio in the third quarter of 19 were 15 respectively.

12% and 12.

38%.

We slightly adjusted our profit forecast for the company. It is expected that the company’s EPS in 2019 and 2020 will be 0.

66 yuan and 0.

80 yuan, the final net asset is expected to be 6 at the end of 2019.

08 yuan, calculated at the closing price of 2019-10-25, the corresponding PE in 2019 and 2020 are 13 respectively.

2 and 10.

9 times, corresponding to 1 at the end of 2019.

43 times.

We maintain our prudent overweight rating on the company.

Risk warning: Asset quality fluctuates more than expected, and scale expansion is less than expected