CITIC Bank (601998) Third Quarterly 深圳桑拿网 Report Study: Increase in interest margin slightly exceeded expectations

Event: On the evening of October 17, CITIC Bank released its third quarter 2019 performance report.

Investment suggestion: CITIC Bank’s third-quarter performance in 2019 is slightly higher than expected, of which the net interest margin has been increased by 2bps, which is higher than expected; asset quality remains stable, and provision coverage ratio improves.

Considering that the company continues to deepen the advancement of the integrated two-wing strategy and continuously strengthen risk management and control, it is expected that the company’s net profit growth attributable to mothers in 2019/20 will be 7 respectively.

3% and 6.

5%, EPS is 0.

95/1.

01 yuan / share, the current sustainable corresponding 19/20 PE is 6 respectively.

4X / 6.

0X and PB are 0.

67X / 0.

62X, CITIC Bank’s A / H shares in the past three years, the company has evaluated the dynamic PB hub at 0.

8X / 0.

Around 6X, considering the current fundamental situation of CITIC Bank, we believe that the reasonable level of A / H shares of CITIC Bank should be 0.

8X / 0.

6X, while 2019 is expected to have a CITIC Bank BVPS of 8.

96 yuan / share, the corresponding reasonable value is 7.

17 yuan / share, 5.

Around 95HKD / share, maintain BUY rating.

Risk warning: 1. Economic growth exceeds expectations; 2. Asset quality deteriorates severely.

Core point of view: The performance was slightly better than expected, and the growth rate of revenue and PPOP increased. The first three quarters of 2019 achieved revenue of US $ 1,424 trillion, an increase of 17.
.

30% growth rate over 19H1 (ten years +14.

93%) up 2.

38%; Net profit attributable to shareholders of the parent company was 407.

500 million, an increase of 10 in ten years.

74%, earlier 19H1 (ten years +10.

05%) increased slightly by 0.

69pct, performance was slightly higher than expected.

Among them realized net interest income 872.

5 ppm, an increase of 13 in ten years.

52% (VS19H1: +14.

76%, down 1.

24pcts); net income from program fees is 430.

60,000 yuan, an increase of 32 in ten years.

08% (VS19H1: +29.

41%, up 2.

66 pcts); realized a pre-provision profit of US $ 104.6 million and a year-on-year growth rate of 2 higher than 19H1.

33% to 19.
71%.
Net interest margin increased by 2bps month-on-month, slightly exceeding expectations. According to our calculations, the company’s net interest margin and net interest margin in 2019Q3 increased by 2bps to 1, respectively.

87% and 1.

67% (estimated value), slightly exceeding market expectations, mainly due to the company’s rapid growth in deposits this year, the balance of deposits in 19Q3 exceeded the growth rate of up to 13.

2%, achieving three consecutive quarters of growth; at the same time, the 19Q3 RRR cut also released part of the budget funds also played a role in raising the level of interest margin.

Q3 Allocation of loans to assets in the asset class, deposit growth and increase in interbank debt1.

As of 19Q3, the company’s total assets were 64,619 trillion, an increase of 10 in ten years.

18%, an increase of 0 from the previous month.

99% (VSH1: +2.

52%), of which total loans amounted to US $ 39,561 billion, an annual increase of 12.

67%, an increase of 3 from the previous quarter.

13% (VSH1: +2.

95%), a rapid growth and improvement; however, bond investment assets were 1,754.8 billion, a long-term growth of 14.
.

39%, a decrease from the previous month.

95% (VSH1: -0.

54%), the third quarter continued to reduce the allocation of investment-type assets; the size of interbank assets was 288.5 billion U.S. dollars, ending the state of contraction (while at the same time and the chain growth rate was 0.

96% and 6.

16%).

2.

The resistance budget is 59,759 trillion, a 10-year increase.

10%, an increase of 0 from the previous month.

83% (VSH1: +2.

69%); of which deposits were US $ 40,503 billion, a year-on-year increase of 13.

19%, an increase of 0 from the previous month.

39% (VSH1: +5.

58%), Q3 deposit growth has improved on a quarter-on-quarter basis;
.

28% 失败:重查 (VSH1: -29.

(04%) to 5,562 trillion; inter-bank debt increased by 8 from the previous month.

11% (VSH1: -4.

92%) to 1.0257 trillion.

Asset quality remained stable and provision coverage level increased by 1.

2019Q3 NPL ratio 1.

72%, unchanged from the previous month; the balance of non-performing loans increased slightly by 20 from the previous month.

29 trillion to 681.

90 trillion, asset quality remains stable.

2.

After calculation, write-off, write-back and transfer-out, the first three quarters of the annualized bad generation generate substitution 1.

53% (VS2019H1: 1.
65%), improved in the third quarter.

3.

Provision coverage in Q3 2019 increased 9 MoM.
7% to 174.

8%, loan allocation increased by 16bps to 3 from the previous quarter.

01%, both improved