Greater China Banks Daily：QIFU Q2 results； First~home mortgage rate can be as low as 2.9% in Guangzhou

Investment Rating - The report assigns a "Buy" rating to several banks including BOC, CCB, CMB, and CITIC, while ICBC, ABC, PSBC, and BOCOM are rated as "Neutral" and Huishang is rated as "Sell" [8][9]. Core Insights - QIFU reported a non-GAAP net income of Rmb1,417 million for Q2 2024, reflecting a 17% quarter-on-quarter increase, driven by improved asset quality and a write-back of provisions [1]. - The first-home mortgage rate in Guangzhou has been reduced to as low as 2.9%, following a recent cut in the Loan Prime Rate (LPR), which is expected to stimulate housing demand [2]. - Non-bank financial institutions have been purchasing government bonds at premium prices, indicating a shift in market dynamics and potential regulatory scrutiny [3]. - The annualized yield of wealth management products has decreased by 194 basis points to 2.4% due to rising bond yields, impacting the attractiveness of these products [4]. Summary by Sections Financial Performance - QFIN's Q2 2024 results showed a non-GAAP net income of Rmb1.417 billion, exceeding guidance by 13%, with a strong operating profit increase of 46% quarter-on-quarter [1]. - The forecast for 2024E non-GAAP net income has been raised to Rmb5.8 billion, indicating a 29% growth year-on-year [1]. Mortgage Rates - The first-home mortgage rate in Guangzhou is now as low as 2.9%, closely aligning with the housing provident fund's borrowing cost of 2.85% [2]. - The average first-home mortgage rate across 45 major cities is reported at 3.29% [2]. Market Dynamics - Non-bank financial institutions are reportedly avoiding state-owned banks for bond purchases, reflecting a strategic shift in their investment approach [3]. - The increase in bond yields has led to a decline in the net asset value of wealth management products, highlighting the impact of market conditions on investment products [4]. Valuation Summary - The report provides a valuation summary for various banks, indicating potential upside for "Buy" rated banks such as CMB (40.6% upside) and CITIC (31.7% upside) [8]. - The average dividend yield for H-share banks is noted at 7.7%, with varying growth rates across different institutions [8].