Sunan Bank (603323) Quarterly Report Comment: Stable Performance and Bad Exposure Increased

Sunan Bank (603323) Quarterly Report Comment: Stable Performance and Bad Exposure Increased
Event: On the evening of October 29, Sunan Bank disclosed its 3Q19 performance: 3Q19 achieved revenue 26.09 million yuan, a year-on-year increase of 14%; net profit attributable to mothers was 8.2.8 billion, +15 year-on-year.11%; the annualized average ROE is 11.01%; as of 3Q19, total assets were 1261.780,000 yuan, an increase of 8 earlier.05 averages; non-performing loans decreased by 1.53%, provision costs 208.89%, with a loan-to-loan ratio of 3.2%.  Opinion: The growth rate of revenue has dropped, and the growth rate of net profit attributable to mothers has increased in 3Q19. Revenue has increased by + 14% year-on-year, which was 0 in the previous 1H19.In the 18 quarters, revenue maintained steady growth; in the third quarter of 19, net profit attributable to mothers + 15 year-on-year.11%, an increase of 0 from 19 in the previous quarter.31 units.Through performance attribution dismantling, the main scale of profit growth was scale expansion (+18.72 pct), non-interest income (+4.07pct), provision (+1.78 pct), interest margin (-8.79 pct), cost (-0.95 pct) and cholesterol (-0.11pct) cause drag.In the third quarter of 19, the average ROE was expected to be 11.01%, an increase of 1bp from the end of 2018.  The scale of assets expanded rapidly, and the net interest margin fell slightly. The scale of assets expanded rapidly.In the third quarter of 19, the asset scale was 1261.780,000 yuan, +14.2%, asset size continued to grow rapidly; loans accounted for an increase of 1 compared to 1H19.29 single to 54.07%.Loan balance of 670 in 3Q19.94 billion, a year-on-year increase of +16.6%; deposit balance 913.55 billion, a year-on-year increase of +14.4%, the scale of deposits and loans still maintained rapid growth.  Net interest margin fell slightly.We estimate that the net interest margin in 3Q19 is 2.74%, a decrease of 12bp from the previous 1H19, mainly due to the decrease in the rate of return on interest-earning assets.Measured 3Q19 interest-earning asset income increased 4.73%, a quarter-on-quarter drop of 12BP, is expected to be caused by the decline in new loan yields.Interest-bearing debt costs CO2.09%, down 1 BP from the previous month.  The greater the adverse exposure, the higher the core capital adequacy ratio, the higher the NPL ratio, and the lower the provision coverage ratio.In the third quarter of 19, the non-performing ratio increased by 27 bp to 1 from the previous quarter.53%; attention loans fell by 36bp to 4 from 1H19.05%, or the company’s serious adverse exposure, due to the migration of migrants down to the category of attention.The loan-to-loan ratio in the third quarter of 19 was 3.2%, 16bp lower than the previous 1H19; provision coverage ratio was 208.89%, a decrease of 58 from the previous 1H19.13 units.  Core capital strength.Core Tier 1 capital adequacy ratio in the third quarter of 1912.47%, 4bps higher than the previous 1H19; Tier 1 capital adequacy ratio and capital adequacy ratio were 12 respectively.47%, 14.97%, higher than the regulatory requirements.  Investment suggestion: The interest margin is relatively high, and the core capital is sufficient.74%, in the forefront of 南京夜网论坛 listed banks; the scale of deposits and loans has grown rapidly, and the structure of loan assets and liabilities has been further optimized; the core tier 1 capital adequacy ratio is as high as 12.47% will strongly support the growth of its interest-earning assets.  We expect Suning Bank’s earnings growth rate to be 13 in 19/20.6% / 10.7%; maintain target value of Sunong Bank 1.1x 19 PB, corresponding to a target price of 7 yuan / share, maintaining the “overweight” rating.  Risk warning: the quality of assets deteriorates badly; the Sino-US trade conflict causes the textile industry in Wujiang area to decline again.