Room forfee income growth.BTJ’s 1H16net profitwas RMB2,593mn, up 13.4% YoY. With NIM expandingby 8bps YoY to 2.06%in 1H16and a 8.2% HoH loans growth as of June2016,NII rose by 19.3%%YoY. Meanwhile, despite settlement and clearing fees dropped YoY by 39.9%, net fee income surged 84.2% YoY on a sharp rise of 236.7% YoY in wealthmanagement services feeand a 39.4% YoY increase in acceptance and guarantee commitment fee. Net fee income to operatingincome therefore increased by 3.75pptYoYto 10.79%-a level still low when compared to peers. Hence, we believe huge roomfor growth still existsfor BTJ.
Continuousbalance sheet restructuring.Proactive balance sheet management continuedin 1H16. Withthe 8.24% and 33.5% HoH increase in net loans and investment balances, investmentin the assetmix went up by 8.5ppt HoH to 44.5% in 1H16.We believe those were BTJ’s strategic movesto offset the sharper decline in average loan yield (1H16: YoY -76bps to 5.33%) than that of average investmentyield (1H16: YoY -39bps to 5.25%). Meanwhile, the proportion of interbank and repo assetsin the asset mix further reduced from 20.2%of total in Dec 2015 to 11.8% in Jun 2016.
Decent asset qualitywith strong buffer.As of June2016, NPL ratio inched up by 7bps HoH to 1.41%, of whichwholesale & retail sector remained as the major NPL contributorwhose NPL ratio rose by 72bps HoH to 4.3%, accounting for 66.3% of total NPL. NPL ratio of manufacturing sector improved by 34bps HoH to 1.14%in 1H16, which we believe to be a resultof BTJ’s consistent effort in writingoff its NPL portfolio. Provisioning ratio and provision coverage maintainedat high levelsof 2.83%(+10bps HoH)and 201.33%(-1.51pptHoH)in 1H16.
Valuation.The counter is currently trading at 0.91x June-2016 P/B.
Risk factors:1) Asset quality deterioration in Tianjin and eastern China; 2) Price volatility in treasury asset; 3) Effect on business mixoptimizationamid rapid changes in the industry environment.4) Low average daily turnoverof shares.
首页
微信公众号
证券之星APP
