Bank Of Shanghai(SH:601229) GOLDEN SUN SECURITIES·2025-02-23 04:42Investment Rating - The report assigns a "Buy" rating for Shanghai Bank, indicating it is a preferred dividend stock due to its high dividend yield and stable growth in performance [5]. Core Views - Shanghai Bank is characterized by low valuation, high dividend yield, and stable positive growth in performance, making it an attractive investment option [19]. - The bank's dividend yield is 5.24%, which is higher than the industry average of 4.59%, and it has maintained a dividend payout ratio above 25% since 2017, with an increase to 30% in 2023 [19][20]. - The bank's estimated price-to-book (PB) ratio for 2024 is 0.57, indicating a relatively low valuation compared to peers [19]. Summary by Sections Investment Overview - The report highlights the implementation of a moderately loose monetary policy in 2025, which is expected to create room for interest rate cuts, enhancing the attractiveness of high-dividend stocks [19]. - The bank's dividend strategy is expected to remain sustainable due to its high yield and stable performance [19]. Company Overview - Shanghai Bank has a stable management team, with executives continuously increasing their shareholdings over the past six years, reflecting confidence in the bank's long-term value [3]. - The bank has established a strong regional presence, particularly in the Yangtze River Delta, with significant loan distribution in this area [3][9]. Fundamental Analysis - The total asset size reached CNY 3.23 trillion as of Q3 2024, representing a year-on-year growth of 5.5%, supported by favorable regional conditions [20]. - The bank's revenue and net profit for the first three quarters of 2024 were CNY 39.54 billion and CNY 17.59 billion, respectively, showing a year-on-year increase of 0.7% and 1.4% [20]. - The bank's non-performing loan (NPL) ratio was 1.20% as of Q3 2024, continuing a downward trend since the end of 2021, indicating improving asset quality [12][11]. Financial Projections - The report forecasts the bank's net profit for 2024, 2025, and 2026 to be CNY 22.89 billion, CNY 23.32 billion, and CNY 23.78 billion, respectively, with growth rates of 1.55%, 1.88%, and 1.97% [13][14].