SRCB(SH:601825)2024-08-21 11:30Investment Rating - The report assigns a "Recommended" rating for the company, marking its first coverage [2][27]. Core Insights - The company achieved a revenue of 13.917 billion yuan in H1 2024, reflecting a year-on-year growth of 0.23%, while the net profit attributable to shareholders was 6.971 billion yuan, up 0.62% year-on-year. However, Q2 2024 saw a decline in both revenue and net profit by 3.13% and 1.18% respectively, with growth primarily driven by other non-interest income [5][7]. - The company has optimized its funding costs, with a net interest income of 10.181 billion yuan in H1 2024, down 2.61% year-on-year. The net interest margin (NIM) stood at 1.56%, a decrease of 11 basis points from the end of the previous year. The yield on interest-earning assets and the cost of interest-bearing liabilities were 3.48% and 1.98%, respectively, both lower than the previous year-end [7][17]. - The company has shown strong support for key sectors of the real economy, with significant growth in green credit (21.7%), technology enterprises (17.34%), and inclusive small and micro loans (5.7%) compared to the beginning of the year [7][17]. Summary by Sections Revenue and Profitability - In H1 2024, the company reported a revenue of 13.917 billion yuan, with a year-on-year increase of 0.23%, and a net profit of 6.971 billion yuan, up 0.62% year-on-year. The growth in the first half was mainly attributed to other non-interest income [5][7]. Non-Interest Income - Non-interest income increased by 8.86% year-on-year, accounting for 26.85% of total revenue, although it decreased by 1.87 percentage points from the first quarter. The middle-income revenue fell by 17.39%, primarily due to a decline in insurance rates and a 25.46% drop in agency business income. Other non-interest income surged by 29.41%, driven by asset disposal gains and investment income [17][19]. Asset Quality and Capital Adequacy - As of June 2024, the company reported a non-performing loan (NPL) ratio of 0.97% and a focus loan ratio of 1.23%, both down from the previous quarter. The provision coverage ratio was 372.42%, a decrease of 9.42 percentage points. The core Tier 1 capital adequacy ratio improved to 14.68%, up 19 basis points [23][27]. Investment Recommendations - The company is well-positioned in the Shanghai market and the economically developed Yangtze River Delta region, with a strong focus on serving key sectors of the real economy. The report highlights the company's robust asset quality and risk absorption capacity, along with its first implementation of a mid-term dividend, increasing the payout ratio to 33.07% [27][30].