Core Insights - Jiangsu Bank reported a robust performance for the first half of 2025, with total operating income reaching 44.864 billion yuan, a year-on-year increase of 7.78% [1] - The bank's net profit attributable to shareholders was 20.238 billion yuan, reflecting an 8.05% growth compared to the previous year [1] - The bank's asset quality remains strong, with a non-performing loan ratio of 0.84%, down 0.05 percentage points from the end of the previous year [1][7] Financial Performance - Net interest income surged to 32.939 billion yuan, up 19.10% year-on-year, constituting 73.4% of total operating income [1] - The average return on total assets (annualized) was 0.96%, a decrease of 0.12 percentage points from the same period last year [1] - Total assets reached 4.79 trillion yuan, a growth of 21.16% from the end of the previous year, while total liabilities increased by 22.26% to 4.45 trillion yuan [1][5] Business Segments - Corporate banking and retail banking both showed balanced growth, with corporate deposits at 1.42 trillion yuan, up 22.20%, and corporate loans at 1.63 trillion yuan, up 23.30% [2] - Retail deposits grew by 15.25% to 948.4 billion yuan, while retail loans increased by 3.07% to 695.5 billion yuan [2] - The bank's wealth management business saw significant growth, with retail assets under management exceeding 1.59 trillion yuan, marking a historic high [2] Risk Management - The bank's non-performing loan balance was 20.318 billion yuan, with a coverage ratio of 331.02%, indicating strong risk management capabilities [7] - The bank's focus on small and micro enterprises resulted in a loan balance exceeding 750 billion yuan, with significant growth in technology and agricultural loans [3] - The bank's capital adequacy ratio remains a concern, with the core Tier 1 capital ratio declining from 9.12% to 8.49%, highlighting the need for capital replenishment [8] Strategic Positioning - Jiangsu Bank's business is concentrated in economically developed regions, with 84.06% of loans in Jiangsu province, providing a unique geographical advantage [7] - The bank has established a diversified profit growth model through balanced development of traditional and innovative businesses [8] - The bank's ability to transition from scale-driven to value-driven growth will be crucial for its competitive positioning in the evolving banking landscape [8]

Market Overview - The A-share market has shown strong performance, breaking through last year's high, with expectations for continued upward movement supported by reasonable valuations and new positive factors such as a potential interest rate cut by the Federal Reserve and a recovery in public fund issuance [2][3] - The weighted REITs index has decreased by 1.52% during the week of August 18-22, 2025, indicating a downward trend in the secondary market prices of publicly listed REITs [2] Credit Bonds - A total of 375 credit bonds were issued from August 18 to August 22, 2025, with a total issuance scale of 376.74 billion, reflecting a week-on-week increase of 12.45% [3] - The total transaction volume of credit bonds reached 1,286.40 billion, up 16.04% week-on-week, with commercial bank bonds, corporate bonds, and medium-term notes being the top three in transaction volume [3] Convertible Bonds - The CSI Convertible Bond Index increased by 2.8% during the week, with a year-to-date increase of 17.9%, slightly below the equity market performance [4] - Current valuations of convertible bonds are close to or exceed historical highs, yet the equity market remains robust, suggesting continued strong performance in the convertible bond market [4] High-end Manufacturing - Exports of engineering machinery maintained double-digit growth, with excavators, tractors, and mining machinery showing year-on-year increases of 24%, 30%, and 25% respectively [6] - The report suggests focusing on companies like QuanFeng Holdings, JuXing Technology, and Xugong Machinery due to their strong export performance [6] TMT Sector - The company SUTENG has seen rapid growth in its robotics business, indicating a successful strategic transformation [6] - The report highlights the importance of SUTENG's self-research technology and its competitive advantages in the ADAS and robotics ecosystem [6] Agriculture, Forestry, Animal Husbandry, and Fishery - The report notes a slight decline in pig prices, with the average price of live pigs at 13.75 yuan/kg, down 0.07% week-on-week [6] - The government has initiated pork storage measures to boost market sentiment, suggesting a potential recovery in pig prices [6] Medical and Biological Sector - The report recommends increasing allocations to the medical device sector, highlighting undervalued companies in Hong Kong and those with strong growth potential [7] - Companies like Weikang Medical and Mindray Medical are noted for their robust growth and research capabilities [7] Petrochemical Sector - The report indicates a significant market opportunity for the renovation of old refineries, with companies like Sinopec Engineering and PetroChina Engineering expected to benefit [7] - The report emphasizes the trend of "de-involution" in the refining industry, which may lead to a substantial market for dismantling and renovation [7] Basic Chemicals - The second phase of phosphate fertilizer export quotas has been allocated, with leading companies expected to benefit from high overseas prices [7] - The report anticipates continued high demand for high-grade phosphate rock in the short to medium term [7] Non-Banking Financials - AIA Insurance has seen new business value reach new highs, with stable growth in operating profits [10] - The report adjusts profit forecasts for AIA for 2025-2027, maintaining a "buy" rating [10] Real Estate - The property management sector shows steady growth, with a stable dividend outlook from companies like Yuexiu Services [10] - The report notes a slight decline in net profit but maintains a positive outlook due to strong project delivery from related companies [10] Electric New Energy - The report highlights the growth potential in the energy storage battery sector, with companies like Yiwei Lithium Energy expected to benefit from increased demand [24] - The company has adjusted its profit forecasts for 2025, reflecting a strong competitive position in the market [24] Textile and Apparel - The report indicates a decline in profit margins for companies like Li Ning, despite revenue growth [34] - The company is expected to maintain a strong brand presence, with a "buy" rating maintained [34]

Summary of Key Points from the Equity Research Report on China Banks Industry Overview - The report focuses on the **China banking sector**, particularly regional banks and city commercial banks, highlighting their performance and potential for growth amid economic conditions in China [3][9]. Core Insights and Arguments - **Sector Performance**: The China banking index increased by **3.9%** over the past 60 trading days, while the CSI 300 index rose by **7.4%** during the same period, driven by ample liquidity and positive economic releases for 1H25 [3]. - **Market Reaction**: The underperformance of the banking sector is attributed to investor concerns regarding the impact of the interest discount policy on banks' net interest margins (NIM). However, the report argues that the market has overreacted, as the policy aims to balance banks' interests with the financing costs of the real economy [3]. - **Focus on High-Quality Banks**: The report emphasizes a focus on high-quality city commercial banks, particularly those with lower exposure to property loans and stable NIM due to lending practices [3][4]. - **Preferred Stocks**: The report identifies **Bank of Hangzhou (BoHZ)**, **Bank of Chengdu (BoCD)**, and **Bank of Jiangsu (BoJS)** as preferred stocks, all rated as Buy, due to their strong asset quality, local economic conditions, and potential for high returns [3][6][9]. Financial Performance Expectations - **Earnings Growth**: The report anticipates marginally better earnings for 2Q25, with expectations of a recovery in non-interest income and stabilization of NIM due to falling liability costs [4]. - **NIM Stabilization**: It is expected that the NIM of top city commercial banks will stabilize in 2H25, supported by a decrease in liability costs and a net increase in mortgage loans in certain regions [4]. - **Credit Demand**: Weaker credit demand is anticipated compared to 1H, but city commercial banks with strong regional presence are expected to outperform their peers in loan growth [4]. Adjustments to Estimates - **Net Interest Income**: Estimates for net interest income have been raised due to expected stabilization of NIM in 2H25 [5]. - **Non-Interest Income**: Estimates for non-interest income have been lowered due to anticipated declines in investment gains amid weaker bond market performance [5]. - **Operating Expenses**: Operating expense estimates have been reduced due to the implementation of AI to enhance efficiency [5]. Regional Economic Strength - **Economic Conditions**: The report highlights the strong economic conditions in **Jiangsu**, **Zhejiang**, and **Sichuan** provinces, which are expected to support the growth of regional banks [23][24][25]. - **Infrastructure Investment**: Jiangsu is noted for its leading position in infrastructure investment and a robust pipeline of large projects, which will benefit local banks [24]. Risks and Valuation - **Key Risks**: The report outlines potential risks including slower-than-expected economic recovery, higher non-performing loan ratios, and adverse impacts from macroeconomic conditions [19][20]. - **Valuation Models**: The report employs the Gordon growth model with trading discounts to derive target prices for the banks covered, indicating significant upside potential for several banks [19][20]. Conclusion - The report concludes with a positive outlook for high-quality city commercial banks in China, emphasizing their potential for excess returns driven by regional economic strength and favorable lending conditions [3][9].

Group 1: North Exchange Specialized and Innovative Index - The North Exchange Specialized and Innovative Index focuses on innovative small and medium-sized enterprises, emphasizing "specialized, refined, unique, and innovative" small giants, providing differentiated value as a rare high-quality small-cap growth index in the market [11][12] - The index consists of high-quality underlying assets, with a market capitalization median of 3.74 billion yuan, lower than other indices, indicating a focus on smaller companies [11] - The index has shown high growth potential, with a revenue compound annual growth rate (CAGR) of 40.4% over the past three years, and a high research and development investment ratio of 6.2% [11] Group 2: Saint Bella (2508HK) - Saint Bella is a well-known company in the high-end confinement service sector, aiming to provide comprehensive family care services from pregnancy to elderly care, with a projected adjusted net profit of 117 million, 191 million, and 287 million yuan for 2025-2027 [3][14] - The company has established four core advantages: strong brand recognition in high-end confinement services, a light asset model with standardized training, vertical and horizontal expansion in family services, and international market penetration targeting overseas Chinese [17] - The family care industry in China is expected to grow from 392.8 billion yuan in 2019 to 711.3 billion yuan in 2024, with a CAGR of 12.6%, indicating a favorable market environment for Saint Bella [17]

Core Viewpoint - Jiangsu Bank has reported strong financial performance for the first half of 2025, showcasing significant growth in revenue and net profit despite a declining market interest rate environment [1][2]. Financial Performance - Jiangsu Bank achieved an operating income of 44.864 billion yuan, a year-on-year increase of 7.78% [1][2]. - The net profit attributable to shareholders reached 20.238 billion yuan, up 8.05% year-on-year, with the second quarter net profit surpassing 10.458 billion yuan for the first time [1][2]. - The bank's return on assets (ROA) was 0.96% and return on equity (ROE) was 15.64% [2]. Asset Growth - As of June 30, 2025, Jiangsu Bank's total assets amounted to 4.79 trillion yuan, reflecting a growth of 21.16% from the end of the previous year [3]. - Total deposits reached 2.54 trillion yuan, up 20.22%, while total loans increased by 15.98% to 2.43 trillion yuan [3]. Loan and Deposit Performance - Corporate deposits stood at 1.42 trillion yuan, growing by 22.20%, and corporate loans reached 1.63 trillion yuan, with a growth rate of 23.30% [5]. - The bank's manufacturing loans amounted to 360.6 billion yuan, an increase of 18.90%, while infrastructure loans grew by 31% to 691.2 billion yuan [5]. Interest Income and Cost Management - Net interest income for the first half of 2025 was 32.939 billion yuan, a year-on-year increase of 19.10% [3]. - The bank maintained a cost-to-income ratio of 22.21%, indicating effective cost management [3]. Asset Quality - Jiangsu Bank's non-performing loan (NPL) ratio was 0.84%, a decrease of 0.05 percentage points from the end of the previous year [2][7]. - The bank's NPL balance was 20.318 billion yuan, with a focus on maintaining stable asset quality [7]. Capital Adequacy - As of June 30, 2025, the capital adequacy ratio was 12.36%, with a decline in the core tier one capital ratio to 8.49% [4]. Market Position and Initiatives - Jiangsu Bank ranked first among city commercial banks in debt financing tool underwriting, with a total scale exceeding 150 billion yuan [6]. - The bank has actively increased credit investments to support the real economy, particularly in key sectors such as manufacturing and green finance [5][6].

Group 1 - Jiangsu Bank issued a 200 million yuan "Green Factory Loan" to a Fortune 500 company, supporting the green transformation of enterprises and contributing to green finance practices [1] - The loan issuance aligns with national policies promoting green and low-carbon development, showcasing Jiangsu Bank's commitment to local green economy services [1] - The recipient company, a Sino-foreign joint venture specializing in heavy truck manufacturing, has made significant progress in reducing waste pollution and energy consumption through various environmental and energy-saving projects [1] Group 2 - The core innovation of Jiangsu Bank's "Green Factory Loan" is the linkage between loan interest rates and the green factory rating as well as the ESG evaluation of enterprises [2] - Companies can enjoy lower interest rates by improving their green factory standards and optimizing ESG performance during the loan period, effectively translating green performance into financing cost advantages [2] - Jiangsu Bank aims to establish itself as a leading domestic and internationally influential green finance brand, accelerating its progress in green financial development [2]

Core Viewpoint - Jiangsu Bank reported a steady performance in H1 2025, with revenue and net profit growth driven by strong net interest income and effective cost management [1][2][6]. Financial Performance - H1 2025 revenue reached 44.864 billion yuan, a year-on-year increase of 7.78%, while net profit attributable to shareholders was 20.238 billion yuan, up 8.05% year-on-year [1][2]. - Net interest income for H1 2025 was 32.939 billion yuan, showing a significant increase of 19.10% year-on-year, attributed to effective liability cost management [2][4]. - Non-interest income faced pressure, with net fees and commissions growing by 5.15%, but fair value changes recorded a net loss of 226 million yuan compared to a net gain of 2.046 billion yuan in the same period last year [2][3]. Asset Quality and Risk Management - The non-performing loan (NPL) ratio decreased to 0.84%, down 5 basis points from the beginning of the year, indicating improved asset quality [1][5]. - The provision coverage ratio stood at 331.02%, although it decreased from the beginning of the year, it remains significantly above regulatory requirements [5][6]. Credit Growth and Business Segmentation - Total new loans in H1 2025 amounted to 334.8 billion yuan, a year-on-year increase of 174.4 billion yuan, with corporate loans driving this growth [3]. - Corporate loans (excluding discounts) grew by 23.30% year-on-year, while retail loan growth showed divergence, with personal loans increasing by 3.07% [3][6]. Interest Margin and Cost Management - The net interest margin for H1 2025 was 1.78%, a decrease of 12 basis points year-on-year, but still reflects strong performance due to effective liability management [4][6]. - The average interest rate on interest-bearing liabilities was 1.89%, with the average deposit interest rate at 1.78%, down 40 basis points year-on-year, highlighting the bank's cost advantage [4]. Investment Outlook - Jiangsu Bank is positioned as a leading city commercial bank with a stable governance structure and clear strategic planning, benefiting from the developed regional economy of Jiangsu [6][7]. - The bank's long-term investment value is supported by its robust fundamentals, clear growth trajectory, and attractive valuation, with a target price of 13.03 yuan based on a target PB of 0.95X for 2025 [6][7].

Investment Rating - The report maintains a "Recommended" rating for Jiangsu Bank, with a target price of 13.03 yuan [2][8]. Core Views - Jiangsu Bank's performance in the first half of 2025 shows steady growth, with operating income reaching 44.864 billion yuan, a year-on-year increase of 7.78%, and net profit attributable to shareholders of 20.238 billion yuan, up 8.05% year-on-year [2][8]. - The bank's non-performing loan (NPL) ratio improved to 0.84%, down 5 basis points from the beginning of the year, while the provision coverage ratio decreased by 19.08 percentage points to 331.02% [2][8]. - The bank's strong growth in net interest income, which reached 32.939 billion yuan, represents a significant year-on-year increase of 19.10%, driven by effective cost control on liabilities [2][8]. Summary by Sections Financial Performance - Jiangsu Bank's total revenue for the first half of 2025 was 44.864 billion yuan, with a net profit of 20.238 billion yuan, reflecting solid performance [2][8]. - The bank's net interest income showed robust growth, with a year-on-year increase of 19.10%, while non-interest income faced some pressure due to market conditions [2][8]. Loan Growth and Quality - The bank's loan portfolio expanded significantly, with new loans amounting to 334.8 billion yuan, a year-on-year increase of 174.4 billion yuan, resulting in a 15.98% growth in total loans [2][8]. - The corporate loan segment was the main driver, with a 23.30% increase year-to-date, while retail loans showed mixed results [2][8]. Asset Quality - The bank's asset quality indicators improved, with the NPL ratio decreasing to 0.84% and the coverage ratio remaining strong at 331.02% [2][8]. - The bank's proactive approach to provisioning led to a 48.16% increase in credit impairment losses, which slightly constrained profit growth [2][8]. Investment Outlook - Jiangsu Bank is positioned to benefit from its strong regional economic presence and effective management strategies, with projected net profit growth rates of 7.4%, 8.0%, and 7.8% for 2025-2027 [8][9]. - The current stock price corresponds to a 2025E price-to-book (PB) ratio of 0.81X, with a target PB of 0.95X, indicating potential upside [8][9].

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company demonstrated strong credit growth and maintained high asset quality, with a revenue of 44.86 billion yuan and a net profit of 20.24 billion yuan for the first half of 2025, reflecting year-on-year growth of 7.8% and 8.0% respectively [1] - The net interest income increased by 19.1% year-on-year, while non-interest income saw a decline of 20% due to market fluctuations [1][2] - The company’s asset quality indicators improved, with a non-performing loan ratio of 0.84%, marking a historical low [3] Financial Performance Summary - For the first half of 2025, the company achieved a revenue of 448.6 billion yuan and a net profit of 202.4 billion yuan, with a year-on-year growth of 7.8% and 8.0% respectively [1] - The annualized ROE was 15.64%, placing the company among the industry leaders [1] - The total assets reached 4.79 trillion yuan, with a loan balance of 2.43 trillion yuan and a deposit balance of 2.54 trillion yuan, reflecting growth rates of 21.2%, 16.0%, and 20.2% respectively compared to the beginning of the year [2] Asset Quality and Risk Management - The company reported a non-performing loan ratio of 0.84%, down 5 basis points from the beginning of the year, indicating improved asset quality [3] - The provision coverage ratio stood at 331%, demonstrating strong risk mitigation capabilities [3] - The company’s credit impairment losses increased by 48.2% year-on-year, with a specific increase of 22.56% in loan credit impairment losses [3] Earnings Forecast and Valuation - The forecasted net profit for 2025-2027 is 35.4 billion yuan, 40.2 billion yuan, and 45.5 billion yuan respectively, with corresponding year-on-year growth rates of 11.2%, 13.5%, and 13.2% [3] - The current stock price corresponds to a PB ratio of 0.79x for 2025, 0.71x for 2026, and 0.63x for 2027 [3]

Core Viewpoint - Jiangsu Bank's performance is stable with an increase in revenue growth, achieving operating income of 44.864 billion yuan, up 7.78% year-on-year, and net profit attributable to shareholders of 20.238 billion yuan, up 8.05% year-on-year in H1 2025 [2][3] Financial Performance - The annualized weighted average ROE is 15.64%, down 0.78 percentage points year-on-year. In Q2 2025, revenue and net profit attributable to shareholders increased by 9.38% and 7.95% year-on-year, respectively [2] - Net interest income for H1 2025 reached 32.939 billion yuan, up 19.1% year-on-year, benefiting from strong asset scale growth. The net interest margin is 1.78%, down 8 basis points from the beginning of the year [3] - As of June 30, 2025, total loans increased by 15.98% year-on-year, with corporate loans up 23.3% and retail loans up 3.07% [3] Non-Interest Income - Non-interest income for H1 2025 was 11.925 billion yuan, down 14.63% year-on-year, but the decline has narrowed. The company’s intermediary business income grew by 5.15% year-on-year [4] - The fair value changes and investment income were down 1.54% and 111.07% year-on-year, respectively, but the fair value changes saw a significant increase of 577.39% in Q2 due to a recovery in the bond market [4] Asset Quality - As of June 30, 2025, the non-performing loan ratio is 0.84%, down 2 basis points, reaching a historical low. The coverage ratio is 331.02%, indicating a strong risk mitigation level [4] - The personal loan non-performing ratio is 0.87%, down 1 basis point from the beginning of the year, with the business loan non-performing ratio down 37 basis points to 1.67% [4] Investment Recommendation - The company is well-positioned in the economically developed Jiangsu region, with strong financial resources and growth prospects. It has a robust growth momentum in on-balance sheet loans and is focusing on key sectors [5] - The company plans to maintain a dividend payout ratio of 30% in 2024 and continue mid-term dividends in 2025. The projected book value per share for 2025-2027 is 14.16 yuan, 15.67 yuan, and 17.29 yuan, respectively [5]