Investment Rating - The investment rating for Qingdao Bank is "Buy" with a target price of HK$4.15 per share, indicating a potential upside of 27% from the current price of HK$3.27 [4][11]. Core Views - Qingdao Bank is characterized as a growth-oriented city commercial bank deeply rooted in Shandong, with debt reduction efforts expected to improve risk assessments and support strong profit growth [1][10]. - The bank's asset quality is on an improving trend, with a non-performing loan (NPL) ratio of 1.17% as of Q3 2024, slightly above the industry average, but showing a significant decrease from previous years [3][9]. - The bank's return on equity (ROE) has been gradually improving, driven by an expansion in interest margins and operational cost reductions [2][33]. Company Profile - Qingdao Bank was established in 1996 through the merger of 21 urban credit cooperatives and has grown to a total asset size of approximately 669 billion yuan, positioning it at the median level among city commercial banks [19][22]. - The bank has a diversified ownership structure, with major shareholders including Haier Group and the Italian bank Intesa Sanpaolo, which enhances its governance and operational capabilities [28][29]. Financial Analysis - Since 2021, Qingdao Bank's net interest margin has improved, reaching 1.77% in H1 2024, which is 15 basis points higher than the average for city commercial banks [35][37]. - The bank's asset yield was 4.07% in H1 2024, outperforming the average by 4 basis points, while its cost of liabilities was 2.25%, 6 basis points higher than the average [35][37]. - The bank's NPL generation rate has decreased significantly, with a TTM NPL generation rate of 0.64% in H1 2024, down 172 basis points from 2019 [3][10]. Investment Logic - The debt reduction policy is expected to enhance regional risk assessments, with limited impact on credit growth and a favorable outlook for interest margins [10][11]. - The expansion of branch networks has been a key driver for sustained growth, with the number of branches increasing to 196 by H1 2024, providing significant room for loan growth [11][22]. Profit Forecast and Valuation - The projected growth rates for Qingdao Bank's net profit from 2024 to 2026 are 20.16%, 10.38%, and 11.36%, respectively, with corresponding book values per share of 6.45, 6.97, and 7.67 yuan [11][13].
青岛银行（03866）：首次覆盖：经济大省的成长性城商行