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China Everbright Bank (601818): ROE continues to improve bad and good

China Everbright Bank (601818): ROE continues to improve bad and good

Introduction to this report: The fundamentals have substantially improved, ROE continues to improve gradually, and asset quality is better than the book.

Raise target price to 6.

12 yuan, 36% of the current price space, increase the level of holdings.

Investment points: Investment advice: Profitability will continue to 佛山桑拿网 improve and is expected to continue.

Increase 19/20/21 net profit growth forecast to 13.

75% (+3.

62) / 12.

13% (+2.

19) / 10.

55% (+1.

98pc), EPS0.

70 (+0.

02) / 0.

79 (+0.

03) / 0.

88 (+0.

05) Yuan, BVPS 6.

12/6.

73/7.

40 yuan, the current price corresponds to 6.

41/5.

69/5.

13 times PE, 0.

74/0.

67/0.

61 times PB.

Fundamentals improved substantially, raising target price to 6.

12 yuan, corresponding to 1 in 19 years.

00 times PB, holding level.

Performance overview: 19Q1-3 returns to mother’s net profit every +13.

1%, revenue +23.

2%, ROE (annualization) 13.

2%.

Non-performing rate in the third quarter of 19

54%, QoQ -3bp; provision coverage rate was 179%, QoQ + 1pc.

New understanding: Profitability is expected to continue to improve Profitability continues to improve.

19Q1-3 annualized ROE13.

2%, previously increased by 49bp, continuing the improvement trend of 19H1.Thanks to the continuous improvement of ROA since 2018 and the equity multiplier has stabilized.

Fundamental changes have taken place, and ROE improvement is expected to continue.

Revenue maintained rapid growth.

Before 19Q1-3 revenue was + 23%, and the growth rate ranked first among listed stock companies.

The growth rate of revenue was a small -3pc from 19H1, mainly due to the high base. The actual average daily interest margin in 19Q1-3 was still 1bp higher than in 19H1.

It is expected that annual revenue growth will remain high.

Asset quality is steadily improving.

Non-performing rate in the third quarter of 19

54%, -3bp from the previous month; 19Q1-3 estimated that the bad generation rate decreased by 4bp from the first half of the year, and it is said to be the result of overdue 60+ crediting, and the actual asset quality is better than the book.

Provision coverage ratio + 1pc to 177%.

Risk Warning: Economic Stall, Bad Outbreak