QILU BANK(601665) Changjiang Securities·2024-11-06 01:53Investment Rating - The investment rating for the company is "Buy" and is maintained [3]. Core Views - The company has demonstrated continuous high growth in performance, with a revenue increase of 4.3% year-on-year for the first three quarters and a net profit growth rate of 17.2%, ranking fourth among A-share listed banks this year [3][4]. - The asset quality has been improving consistently, with a non-performing loan (NPL) ratio of 1.23% at the end of the third quarter, a decrease of 1 basis point from the previous quarter, and a provision coverage ratio of 313%, up 3.5 percentage points from the previous quarter [3][6]. - The bank's strategy of branch expansion is driving rapid credit growth, with loans increasing by 10.8% compared to the beginning of the year, and deposits growing by 9.5% [4][5]. Summary by Sections Financial Performance - For the first three quarters, the company's revenue grew by 4.3% year-on-year, while net profit increased by 17.2%, showing a steady upward trend [3][4]. - The net interest income growth rate was -2.1%, but the decline is narrowing, while non-interest income, including fees and investment income, maintained a high growth rate of 22.7% [3][4]. Asset Quality - The asset quality indicators have improved across the board, with the NPL ratio decreasing and the credit cost significantly declining [6][5]. - The bank's credit impairment losses have decreased, contributing to the high growth in net profit [3][6]. Branch Expansion and Loan Growth - The bank has expanded its branches according to plan, with the number of branches reaching 191, which enhances its market presence and loan market share in local areas [4][5]. - The bank's loan growth is expected to achieve a high rate of around 15% for the year, with a focus on inclusive finance and green finance [4][5]. Interest Margin and Deposit Costs - The net interest margin was 1.54%, reflecting a conservative risk appetite, but deposit costs are expected to continue improving, which may alleviate some pressure on the net interest margin [5][6]. - The deposit interest rate has been decreasing, providing room for further reductions in the future [5][6]. Investment Recommendation - The company is positioned in a sustainable high-growth cycle, with steady expansion of branches and asset scale, and continuous improvement in asset quality, maintaining a leading profit growth rate in the industry [6][5]. - The stock is currently valued at 0.70 times the 2024 price-to-book ratio, with a significant upside potential based on its long-term growth prospects [6].