Bank Of Shanghai(SH:601229) HTSC·2025-10-31 08:26Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 12.02, corresponding to a 2025 target PB of 0.68 times [7][5]. Core Insights - The company has shown stable performance with a slight increase in profit growth, with a year-on-year increase in net profit and operating income of 2.8% and 4.0% respectively for the first nine months of 2025 [1]. - Non-interest income has demonstrated strong resilience, with a year-on-year growth of 10.1% in the first three quarters of 2025, driven by a significant increase in investment income [3]. - The company has improved its credit quality, with a stable non-performing loan (NPL) ratio of 1.18% and an increase in the provision coverage ratio to 255% [4]. Summary by Sections Financial Performance - For the first nine months of 2025, the annualized ROE and ROA were 10.04% and 0.74%, reflecting a slight decline of 0.35 percentage points and 0.01 percentage points year-on-year respectively [1]. - The company reported a net interest margin of 1.16% for the first nine months, benefiting from optimized funding costs [2]. Loan and Deposit Growth - As of September 2025, total assets, loans, and deposits grew by 2.5%, 2.0%, and 3.0% respectively compared to June 2025, indicating a slight acceleration in credit issuance [2]. - The company has focused on supporting the real economy, with significant growth in technology loans (16.3%), green loans (8.9%), and manufacturing loans (10.1%) [2]. Non-Interest Income and Taxation - The company’s non-interest income accounted for 31.9% of total revenue, with a year-on-year increase of 3.0 percentage points [3]. - The effective tax rate decreased significantly by 83.1% quarter-on-quarter, contributing positively to profit release [3]. Asset Quality and Provisions - The NPL generation rate improved slightly, with a quarterly NPL generation rate of 0.91%, down 83 basis points from the previous quarter [4]. - The company’s credit impairment has increased, with an annualized credit cost of 1.47%, reflecting a year-on-year increase of 15 basis points [4]. Valuation Metrics - The forecast for net profit for 2025-2027 is RMB 242 billion, RMB 253 billion, and RMB 268 billion, with corresponding year-on-year growth rates of 2.8%, 4.6%, and 5.9% [5]. - The estimated PB for 2025 is 0.53 times, compared to a peer average of 0.72 times [5].