Ping An Bank (000001): Debt costs and retail non-performing loans decrease sequentially

Event On October 21, Ping An Bank announced its 2019 third quarter performance report, in which operating income increased by 18 per year.

80%, net profit attributable to mothers increases by 15 per year.

47%.

  Brief Comment 1. The single quarter growth rate of revenue and net profit was slightly higher than the previous quarter, but still maintained a high growth rate. The first three quarters of 2019 revenue was 1029.

580,000 yuan, an increase of 18 in ten years.

80%; net profit attributable to mother 236.

21 ppm, an increase of 15 in ten years.

47%.

From a single quarter point of view, 3Q revenues increase by 19 per year.

39%, an increase of 1 over the previous quarter.

62 averages; 3Q net profit increased by 16.

01%, an increase of 1 over the previous quarter.

40 units.

In terms of revenue structure, net interest income increased by 21.

53%, net non-interest income increases by 14 per year.

17%.

  From the perspective of profit breakdown, net profit attributable to mothers increased by 31 in the third quarter.

6.5 billion, of which 57 revenues increase each year.

06 ‰; operating expenses increase by 17.

74 ppm; retina increases by 3 per second.

4 billion.

  Profitability doubled slightly.

The statutory annualized ROE for the March 2019 quarter reached 12.

64%, an increase of 4bp over the same period last year.

The EPS is 1.

32 yuan / share, an increase of 0 over the same period last year.

18 yuan.

The BVPS is 13.

82 yuan / share, an increase of 1 over the same period last year.

28 yuan.

  2, █ Net income rises 21 each year.

53%, the net interest margin rose 27bp compared to the initial period, the first three quarters of 2019 net interest income 662.

69 ppm, an increase of 21 per year.

53%; 64% of total revenue.

37%, an increase of 1 over the same period last year.

45 units.

Mainly due to the increase in loan size and the recovery of net interest margin.

  In the first 3 quarters, the NIM was 2.
62%, flat at the end of the second quarter and an increase of 27bp earlier.

  Among them, the interest-earning asset yield is 5.

21%, an increase of 10bp per year, mainly because the loan interest rate increased by 27bp.

Interest-bearing debt cost ratio 2.

67%, a previous decline of 23bp, mainly due to peer denial and response to the significant drop in bond cost rates of 75bp and 92bp; deposit balances rose slightly by 6bp to 2.

48%, of which the balance of structured deposits is 5095.

US $ 6.1 billion, an increase of US $ 70.6 billion compared with the end of the previous two quarters. It is expected that under the policy supervision of the “Notice on Regulating Structured Deposits” in the fourth quarter, the balance of structured deposits will improve, leading to a reduction in the cost of savings.

  Non-interest income in the first three quarters of 2019 was 366.

89 ‰, an increase of 14 per year.

17%; including 278 net fees and commission income.

31 ppm, an increase of 17 per year.

41%; 27% of total revenue.

03%, a decrease of 0 compared with the same period last year.

32 units.

  3. The non-performing ratio remained stable, and the provision coverage ratio increased significantly. The loans and advances in the first three quarters were consolidated2.

15 trillion yuan, an increase of 7 from the beginning of the year.

69%, the balance of non-performing loans was 361.

2.7 billion, an increase of 12 over the beginning of the year.

2.2 billion, bad consequences1.

68%, which was flat at the end of the earlier quarter and fell 7bp earlier.

Concerned loans accounted for 19Q3 2.

39%, down 9bp and 19bp respectively from the end and the first two quarters.

  Provision coverage in the first three quarters was 186.

18%, an increase of 30 from the beginning of the year.

94 units.

The ratio of loan to loan in the first three quarters was three.

13%, an increase of 0 from the beginning of the year.

43 units.

  4. The current capital adequacy ratio has increased due to the compulsory conversion of convertible bonds. By the end of the third quarter of 2019, the core tier one, tier one and capital adequacy ratios were 9, respectively.

75%, 10.

54% and 13.

36%, a change of 121bp, 115bp, and 186bp from the beginning of the year; mainly because Ping An Bank’s 26 billion convertible bonds triggered compulsory redemption clauses in the third quarter.

  5. The proportion of retail loans continued to increase, and the retail non-performing ratio decreased by 2bp from the end of the second quarter. At the end of the third quarter, Ping An Bank consolidated loans and advances by 21511.

670,000 yuan, an increase of 7 from the end of last year.

7%, of which retail loans accounted for 59.

2%, an increase of 0 at the end of the previous quarter and the end of the previous year.

4 and 1.

4 units, retail loan NPL ratio 1.

07%, which was 2bp lower at the end of the earlier quarter and remained stable earlier.
Among them, the balances of housing mortgage loans, new loans, auto finance loans, credit cards and other types of retail loans changed earlier respectively4.
86%, 1.

05%, -2.

18%, 9.

66% and 38.

76%, auto finance loans were mainly affected by the downturn in the auto industry this year; except for other types of 杭州桑拿 retail loan non-performing ratios, which rose significantly to 60bp, other retail loan business non-performing ratios all increased slightly by 3bp to 19bp earlier.

  The number of retail AUM and retail customers is 1.

87 trillion and 93.66 million households, an increase of 32% and 12% respectively over the beginning of the year.

  6. Investment recommendations From the March quarterly results of March 2019, Ping An Bank’s revenue and return to net profit have maintained a high growth rate; the return on assets has risen and the cost of losses has driven NIM to rise, and asset quality continues to rise in loan yieldsAt the same time, it maintained stability, in which the retail transformation continued to deepen, and the proportion of retail loans continued to increase.

We have just released Ping An Bank’s in-depth report, “Apparent Improvement, and Estimates of Conversion.” We believe that Ping An’s improvement is reflected in three aspects: First, the increase in the placement of corporate loans will reduce the cost ratio on the debt side.

The compulsory conversion of 26 billion convertible bonds will increase the capital adequacy ratio by about 1%. After the increase of core tier one capital, Ping An will increase the issuance of public debt. Under the strategic arrangement of fine-tuning the public, it has a strong ability to derive public debt deposits and depositsThe pressure on the debt side has eased, and the debt-side cost rate will decline steadily, which is expected to be seen in the annual report.

  Second, the income side will also rise steadily, and the growth rate of net profit will exceed expectations.

The proportion of retail loans reached 59%, high yields can be maintained, and through retail distribution volume reduction, structure optimization, risk reduction, and risk will be reduced.

The revenue side will rise steadily in the future.

  Third, the asset side will also improve steadily.

All loans overdue for 90 days are counted as non-performing loans. In the future, the proportion of overdue loans in total loans will also decline steadily, the risk of stocks will continue to decline, and the asset side will improve significantly.

Therefore, no matter it is the cost side, the income side or the asset side, Ping An Bank can see improvement.

These will be reflected in the recovery of ROE, and ROE is expected to reset 12.

4% rebounded to about 14%, raising its valuation.

  The company’s 2019 PB estimates are currently undervalued.

Short-term market prices and their retail non-performing ratios, compensation costs, and other issues, these reductions will be significantly alleviated, and Ping An’s estimates will rise steadily.

  We forecast a 19-year growth in operating income of 19/20.

51% / 22.

22%, net profit increases by 16 every year.

02% / 17.

62%, earnings per share were 1.

48/1.

75 yuan, BVPS is 14.

34/15.

91 yuan, PE is 11.

38/9.

68, PB is 1.

18/1.

06, maintain BUY rating, 6-month target price maintained at 22 yuan.

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