Bank of Shanghai (601229) 1Q19: Faster earnings growth and further increase in provisions

Bank of Shanghai (601229) 1Q19: Faster earnings growth and further increase in provisions

Event: On the evening of April 26, Shanghai Bank disclosed 1Q19 results.

In the first quarter of 19, net profit attributable to mothers was 50.

1.9 billion, a year-on-year increase of +14.

12%; revenue 130.

1.5 billion, a year-on-year increase of +42.

16%; annualized ROE is 13.

98%.

南京桑拿网 At the end of March 19, the non-performing loan ratio was 1.

19%, asset budget reached 2.

06 trillion.

Opinion: Revenue growth has further increased, and profit has grown faster. Revenue growth has further increased.

Revenue growth in the first quarter of 19 was as high as 42.

16%, 32 years before 18 years.

The 5% revenue growth accelerated further.

Taking into account the number of revenue bases in 1Q18 and the increase in revenue growth thereafter, it is expected that the revenue growth rate in 19 will be slightly lower than in 1Q19, but will still maintain a high level.

The high revenue growth was mainly due to the obvious expansion of asset scale and widening interest spreads.

Faster profit growth.

Net profit growth in the first quarter of 19 was 14.

12%, earnings maintained rapid growth.

The increase in the difference between revenue growth and net profit growth in the first quarter of 19 was mainly due to the provision of 52 credit impairment losses in the first quarter of 1919.

46 ppm, 1Q18 accrued asset impairment losses26.

3.3 billion.

Optimization of asset structure and improvement of net interest margin Overcome optimization of asset structure and increase in scale.

Total assets in the first quarter of 19 2.

06 trillion, an annual increase of 12.

2%, scale expanded steadily.

The loan budget for the first quarter of 19 was 886.7 billion yuan, a year-on-year increase of 23.

5%; asset-side loans accounted for 43.

0%, an increase of 1 earlier.

0 assets, the asset structure is further optimized.

NIM improves resistance.

18-year net interest margin reached 1.

76%, a slight increase; mainly due to the significant increase in loan yields over the same period, or benefit from a large increase in Internet consumption.

Due to the impact of I9, investment income such as money funds was included in non-interest income, resulting in a 1Q19 change in the net interest margin.

Considering 1Q19 revenue growth of 42.

16%, net fee and commission income only increased by 18.
.

2%, the “actual” net interest margin is expected to increase further.
Asset quality is stable, but there are some concerns. Sufficient provision of assets is stable, but there are some concerns.
The non-performing loan ratio in the first quarter of 19 was 1.

19%, an increase of 5BP earlier, maintaining acceptable levels.

Overdue loan ratio at the end of 18 years.

69%, a year-on-year increase of 64BP; 1Q19 focused on loans1.

84%, remained stable.

According to estimates, the net generation rate of bad in 18 years reached zero.

95%, 19Q1 rose further to 1.

2%, the adverse pressure increased compared to 17 years.

Provisions are looser.

The loan-to-loan ratio in the first quarter of 19 reached 3.

9%, an increase of 0 earlier.

1 unit; provision coverage reached 328.

8%, sufficient provision, increased ability to resist risks.

Investment suggestion: Faster earnings growth, benefiting from loosening market interest rates and easing policies, especially consumer loans. In the context of the economic downturn, adverse future pressures may rise, or lag will affect future performance.

In the short term, it will still benefit from the low market interest rate. Considering the economic downturn and financial supervision, we maintain its target valuation.

1x 19PB, corresponding to a target price of 15.

99 yuan / share (in order to make the target price comparable to the current price, the effect of profit distribution from 10 shares to 3 shares in 19 years is not considered).

Risk Warning: The quality of consumer loan assets deteriorates; the economic downturn exceeds expectations and the quality of corporate loans deteriorates.