"Investor Network" Ding Yingyi

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Judging from the semi-annual report of 2022, 90% of the 42 listed banks achieved double increases in revenue and net profit in the first half of the year. However, Qingdao Rural Commercial Bank Co., Ltd. (hereinafter referred to as "Green Agriculture Commercial Bank", 002958.SZ) has become one of the few revenue decliners.

According to the 2022 semi-annual report released on Aug. 26, the bank achieved 5.333 billion yuan in operating income in the first half of this year, down 3.09 percent from the same period last year, while the net profit returned to its mother was 1.749 billion yuan, up 5.08 percent from the same period last year.

In terms of asset quality, the bank's non-performing loan ratio fell 0.02 percentage points to 1.72% at the end of June from the beginning of the year, but was at the highest level among A-share listed agricultural banks.

Revenue is declining against the trend

Recently, the results of listed banks have been disclosed in the first half of 2022. Most banks have double-digit growth in revenue and net profit, while revenue of Qingnong Commercial Bank has declined rather than increased. The growth rate of 5.08% of net profit returned to the parent has also lagged behind in A-share agricultural banks.

The growth rate of revenue and net profit of Youth Agricultural Commercial Bank in the first half of the year ranks among A-share agricultural commercial banks (unit:%)

In fact, according to the semi-annual report over the years, the bank's revenue growth continued to slow year-on-year in the first half of 2020 until it turned from positive to negative in the first half of this year.

Semi-annual report performance trend of Youth Farmers' Commercial Bank in recent years (unit: 100 million yuan)

Behind the decline in revenue of Qingnong Commercial Bank is the decline in its net interest income in the first half of this year. According to the semi-annual report, the bank's net interest income in the first half of the year was 3.864 billion yuan, down 214 million yuan, or 5.25%, from the same period last year.

The composition of the main business of Qingnong Commercial Bank

"continue to strengthen efforts to serve the real economy and further reduce the financing costs of the real economy," Youth Agricultural Commercial Bank explained in its semi-annual report. At the same time, affected by market interest rates, the average rate of return on interest-bearing assets (4.28%) decreased compared with the same period last year (4.53%) in the first half of 2022, and the net interest margin narrowed. "

In the first half of 2022, the bank's interest income from loans and advances was 5.927 billion yuan, accounting for 71.47% of the total interest income. at the same time, due to the Youth Farmers'"continued to make profits to the real economy, expand the coverage of inclusive financial services, and further reduce the financing costs of the real economy, the average rate of return on loans and advances decreased by 0.25 percentage points compared with the same period last year."

"interest income from loans and advances is the largest component of the bank's interest income," while "net interest income is the main source of the bank's profits," the semi-annual report said.

In short, due to the "concession to the real economy", the average rate of return of interest income from loans and advances decreased, affecting the interest income, and then affecting the total income of youth farmers.

The defect rate is the highest among A-share agricultural and commercial banks.

Overall, the non-performing loan ratio of most listed banks declined in the first half of this year. Industry insiders believe that the relatively stable asset quality of listed banks is due to the acceleration of the disposal of stock non-performing loans in the first half of the year.

By the end of June, the balance of non-performing loans of Qingnong Commercial Bank was 4.175 billion yuan, the non-performing loan ratio was 1.72%, down 0.02% from the end of last year, and the provision coverage rate was 220.03%, down 11.74% from the end of last year.

The bank explained in its semi-annual report that "the main reason for the decline in the non-performing loan ratio is to increase the collection and disposal of the stock of non-performing loans, while strengthening loan quality management, and the growth rate of non-performing loans has slowed down."

However, although the defect rate of green agricultural banks has declined compared with the end of 2021, the bank has the highest defect rate and the lowest provision coverage rate among A-share listed agricultural banks.

The ranking of non-defect rate and provision coverage rate of Youth Agricultural Banks in A-share Agricultural Banks

Before that, some investors questioned the risk control of Qingnong Commercial Bank. "Why is the company's loan defect rate so high that the company is risk-controlled?" At that time, the bank explained that since it was listed in 2019, its non-performing loan ratio as a whole showed a downward trend year by year, and the non-performing loan ratio rebounded at the end of 2021. The main reason was that during the epidemic period, the regulatory regulations were firmly implemented. On the basis of downgrading overdue loans to non-performing loans, loans overdue for more than 60 days but less than 90 days were further downgraded to non-performing loans. Second, under the real estate policy of "no speculation in housing", the real estate market, upstream and downstream are in a period of adjustment, and non-performing loans in the real estate and construction industries have increased; third, under the influence of the complex economic situation and the epidemic situation of COVID-19, the production of some industries and enterprises has shrunk, and the financial situation has deteriorated, affecting the ability to repay principal and interest.

The share price has fallen nearly 20% this year.

According to the official website, Qingnong Commercial Bank was established on June 28, 2012 and listed on the Shenzhen Stock Exchange on March 26, 2019.

At present, the bank has set up Yantai branch and Jinan Zhangqiu branch, with a total of 358 branches, radiating the three most economically dynamic areas of Qingdao, Jinan and Yantai Shandong, and initiated the establishment of five village banks in the province, one in Shenzhen and two in Jiangxi.

Although the A-share volatility has intensified since the beginning of this year, the share prices of some small and medium-sized banks have risen considerably. As of September 5, the share prices of Jiangyin Bank and Changshu Bank, both agricultural banks, rose more than 20% this year, while the shares of Qingnong Bank fell 17.67%, a performance that lagged among A-share listed agricultural banks. On September 5th, Qingnong Commercial Bank closed at 3.08 yuan per share, with a price-to-earnings ratio (TTM) of 5.4 times and a total market capitalization of 17.1 billion yuan.

The share price of A-share Agricultural Commercial Bank rose or decreased from the beginning of the year to September 5 (unit:%)

According to the Investor Relations activity record sheet of Youth Agricultural Bank on May 20, 4 of the 18 questions are aimed at the bank's secondary market share price performance.

Some investors asked, "since the listing, the stock price has continued to fall, and it has fallen below the issue price and the bond price. At present, all the top 10 shareholders of your bank are in a state of full pledge, and there is also a lot of selling pressure on the IPO." and "what is the level of the company's operation compared with other listed agricultural and commercial banks? Why do share prices in the secondary market keep falling? "

The explanation given by the company is, "listed agricultural and commercial banks in different regions have their own course and characteristics according to the economic and social development of different regions." The stock prices of listed companies are affected by market, economic, policy and other factors.

Stock price chart of Qingnong Commercial Bank since the beginning of this year (unit: yuan / share)

Talking about the eye-catching stock price performance of some small and medium-sized banks, industry insiders believe that this is related to the local economic growth rate, coupled with the continued implementation of stable growth policies in the first half of this year, so that some banks have relatively rapid growth in their public business, and the market is expected to be better.

"the divergence in the trend of bank stocks is mainly related to the different speed of credit issuance by different banks." Real estate mortgage and consumer loans have grown slowly so far this year, leading to lower valuations of some banks that focus on retail business, according to a brokerage analyst.

Industry insiders predict that the revenue and net profit of listed banks in the first half of the year are expected to exceed expectations, and high-quality urban agricultural banks are expected to usher in investment opportunities.

For Qingnong Commercial Bank, whose share price fell nearly 20% during the year, under the premise of continuously strengthening its efforts to serve the real economy and further reducing the financing costs of the real economy, how to increase the rate of return while making profits, achieve income growth, and boost confidence in the secondary market, it is still an important issue in front of it. (produced by thinking Finance) ■