Bank Of Shanghai(601229) 兴业证券·2024-08-31 06:09Investment Rating - The report maintains an "Accumulate" rating for Shanghai Bank [1][7] Core Views - Revenue decline has narrowed, and profit continues to grow. In the first half of 2024, revenue and net profit attributable to shareholders decreased by 0.4% and increased by 1.0% year-on-year, respectively. In Q2, revenue and net profit grew by 0.1% and 0.4% year-on-year, respectively [2][4] - The bank is experiencing steady expansion, with corporate loans contributing the majority of the growth. In the first half of 2024, total loans increased by 5.0% year-on-year, with corporate loans up by 4.8% and retail loans up by 0.3% [2][4] - Asset quality remains stable, with a decrease in corporate non-performing loan (NPL) ratio and a slight increase in retail NPL ratio. The overall NPL ratio remained flat at 1.21% [5] Summary by Sections Revenue and Profitability - In H1 2024, Shanghai Bank achieved operating revenue of 26.247 billion yuan, a year-on-year decrease of 0.4%, and a net profit of 12.969 billion yuan, a year-on-year increase of 1.0.%. The decline in revenue has slowed down, while profit continues to grow [3][4] - Net interest income decreased by 10.8% year-on-year, primarily due to a narrowing net interest margin of 1.19%, which has contracted by 15 basis points since the beginning of the year [2][4] - Fee income decreased by 23.5% year-on-year, impacted by market fluctuations and reduced commission rates [2][4] Loan Growth and Composition - Total loans increased by 5.0% year-on-year in H1 2024, with corporate loans contributing 85% of the loan growth. Infrastructure-related industries, leasing and business services, and manufacturing contributed 37%, 24%, and 19% of the loan growth, respectively [2][4] - Retail loan balances decreased compared to the beginning of the year, mainly due to declines in mortgage, credit card, and consumer loans, while personal business loans continued to grow [2][4] Asset Quality - The NPL ratio remained stable at 1.21%, with a corporate NPL ratio decreasing to 1.40% and a retail NPL ratio increasing to 1.11% [5] - The provision coverage ratio decreased to 269%, and the overdue rate decreased to 1.60% [5] Earnings Forecast - The earnings per share (EPS) forecast for 2024 and 2025 has been slightly adjusted to 1.61 yuan and 1.64 yuan, respectively. The estimated net asset value per share at the end of 2024 is 16.52 yuan, corresponding to a price-to-book (PB) ratio of 0.46 times based on the closing price on August 28, 2024 [7]