In the pursuit of quality and efficiency, balancing short-term and long-term goals, and integrating innovation with reform, the financial industry is striving to create a new type of development environment that progresses and promotes mutual growth with customers, returning to the original intention of serving the real economy and moving towards a new stage of high-quality development.

Cultivating internal strength and growing towards goodness.

By deconstructing the semi-annual report of Zheshang Bank (601916.SH, 02016.HK), it can be found that under the guidance of the "Good Finance" concept, Zheshang Bank has a more stable foundation and an optimized structure, fully embarking on a new journey of high-quality development.

Performance is stable with an upward trend, and multiple indicators continue to improve.

As a long-term practitioner of "Good Finance," Zheshang Bank's assets and liabilities have achieved steady growth.

The financial report shows that in the first half of the year, Zheshang Bank's total assets reached 3.25 trillion yuan, an increase of 3.27% over the end of the previous year; at the same time, the total amount of loans and advances also increased to 1.81 trillion yuan, an increase of 5.59% over the end of the previous year.

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This is due to Zheshang Bank's continued focus and investment in the "five major articles," small loans, and weak cyclical industries.

Zheshang Bank focuses on enhancing the stability and quality of liabilities.

As of the end of June, the total liabilities reached 3.05 trillion yuan, an increase of 3.31% over the end of the previous year.

Among them, the deposit balance was 1.94 trillion yuan, an increase of 3.74% over the end of the previous year, and the deposit and loan business grew steadily.

From the performance perspective, among the 42 A-share listed banks, many commercial banks saw negative growth in both revenue and profits in the first half of the year, while Zheshang Bank achieved a business income of 35.279 billion yuan, a year-on-year increase of 6.18%; the net profit attributable to the bank's shareholders was 7.999 billion yuan, a year-on-year increase of 3.31%.

Both revenue and net profit increased, and the business performance moved forward steadily.

At the same time, the non-performing loan ratio steadily decreased, from 1.53% in 2021 to 1.43% in the first half of 2024; the capital adequacy ratio was 12.86%, an increase of 0.67 percentage points over the end of the previous year.

Behind this, the digital risk control system played an important role.

Zheshang Bank insists on intelligent risk control, consolidating the risk preference of "prudence and steadiness" and the credit principle of "small amount and dispersion," highlighting the precise identification of credit risk and forward-looking prevention and resolution, and promoting the transformation of risk control logic from gatekeeping to accompanying.

In addition, the bank's income structure has also been significantly optimized.

This year, commercial banks are facing the pressure of reducing the cost of social financing while maintaining a stable net interest margin, which requires reducing the cost of liabilities.

Therefore, non-interest income has become the key to the bank's transformation and adjustment of the income structure.

The financial report shows that in the first half of 2024, Zheshang Bank's net non-interest income was 11.637 billion yuan, an increase of 2.379 billion yuan year-on-year, an increase of 25.70%.

The proportion of net non-interest income in business income increased from 27.86% in the same period of the previous year to 32.99%, an increase of 5.13 percentage points, effectively compensating for the impact of narrowing interest margins.

The optimization of the income structure makes Zheshang Bank's performance more stable in the counter-cyclical environment.

It can be said that in the first half of the year, Zheshang Bank handed in an answer sheet of "stable progress and stable improvement."

Chain ecological finance provides new momentum for high-quality development.

Against the backdrop of the dual transformation of positioning adjustment and digital transformation in the financial industry, Zheshang Bank has introduced the innovative concept of chain ecological finance.

The core of this concept is to use digital technology to strengthen the industrial chain and the overall industrial ecosystem to promote the effective allocation of resources and further improve the organizational efficiency and development level of the industry.

According to the Zhitong Finance APP, chain ecological finance, with its characteristics of revitalizing and efficiently allocating resources, helps to activate the information flow and capital flow of the upstream and downstream of the supply chain, reduce information asymmetry and friction in transactions, and thereby reduce the operating costs of the entire industrial ecosystem.

In addition, with the help of digital tools such as digital platforms, data centers, and system infrastructure, chain ecological finance can deeply understand customer needs, quickly and accurately reach the niche markets that traditional finance is difficult to cover, seamlessly embed into the business activities and related links of enterprises, and form a fast response service model to support the integrated development and common progress of core enterprises, chain master enterprises, and other small and medium-sized enterprises.

Based on the above characteristics of chain ecological finance, Zheshang Bank has carried out a series of related application practices.

For example, in the field of industrial chain supply chain services, Zheshang Bank focuses on building the upstream and downstream ecosystem of key industrial chains and supply chains, and creatively provides a comprehensive supply chain financial comprehensive service plan covering the entire chain, various scenarios, and comprehensive products, and is committed to enhancing the resilience and security of industrial chains and supply chains.

For the actual orders or receivables between suppliers and core enterprises, Zheshang Bank provides financing support to meet the capital needs of suppliers during the inventory preparation stage or to help them activate receivables; even when the core enterprise cannot provide strong credit guarantees, Zheshang Bank can also expand the scope of financial services for enterprises on the supply chain through products based on big data analysis such as data chain loans.

For the specific needs of different industries, such as energy, automotive, steel and other industries, Zheshang Bank has also customized nearly thirty supply chain financing solutions.

As of the end of June, the balance of the bank's supply chain finance loans exceeded 170 billion yuan, serving more than 3,000 core enterprises and more than 55,000 upstream and downstream customers, among which the proportion of inclusive small and micro enterprises exceeded 75%.

Through this series of exploration and practice, Zheshang Bank has not only enhanced its own financial service capabilities and improved economic benefits but also brought new momentum to economic development.

Considering that chain ecological finance is a customer-centered financial model innovation, the corresponding system and mechanism reforms are particularly important.

In order to better implement chain ecological finance and continuously improve benefits, Zheshang Bank has formulated a plan to restructure the organization, evaluation system, and division of labor centered on customers, aiming to shift from a single professional service capability to a comprehensive service capability; at the same time, balancing economic benefits and social benefits, combining short-term benefits with long-term benefits, deepening customer service, application scenarios, and service ecology, and promoting the business model from "hunting type" to "farming type" transformation.

This move is expected to help Zheshang Bank solve problems encountered in development, comprehensively enhance competitiveness, and stimulate more development potential.

Solidly writing the "inclusive finance" big article.

Small and micro business has always been a strategic focus of Zheshang Bank.

The bank continues to focus on the professional operation of small and micro business, relies on specific scenarios to provide inclusive financial services, and actively promotes the digital transformation of business.

After years of deep cultivation, Zheshang Bank has successfully explored a professional road of sustainable development of small and micro finance.

In terms of organizational structure, the small enterprise business of Zheshang Bank belongs to the large retail sector and has become an important part of the broad retail business.

As of the end of June, Zheshang Bank's small enterprise specialized institutions have reached 214, and the balance of inclusive small and micro enterprise loans was 326.363 billion yuan, an increase of 6.235 billion yuan from the beginning of the year, a growth rate of 1.95%; its inclusive small and micro enterprise loan customers numbered 145,600, an increase of 5,800 from the beginning of the year.

In terms of specific practices, Zheshang Bank implements inclusive finance to help private enterprises grow and develop, increases the support for private enterprise loans, serves all kinds of financial needs of private enterprises, actively promotes the transformation and development of small and micro business scenarios, and develops new small and micro business scenarios around the "government cooperation, small and micro park, professional market, open bank cooperation, and joint linkage" five major scenarios.

At the same time, it promotes the application of digital inclusive scene financial products, accelerates the pilot of key regional online active credit for personal and enterprise scene digital products such as "Shuyi Loan" and "Shuke Loan," and enhances the characteristics of inclusive finance.

In key areas, Zheshang Bank grasps regional economic development and provides a full life cycle of financial advisory services for small and micro industrial parks.

As of the end of June, a total of 2,237 park projects have been developed, and the balance of small and micro park and industrial real estate mortgage loans was 77.512 billion yuan, an increase of 10.204 billion yuan from the beginning of the year.

At the same time, the bank actively innovates and designs financial products and services that fit the production and operation characteristics and capital needs of local small and micro market entities, and increases credit support for local advantages or characteristic industries.

It has launched 63 customized products such as Longyou pig, Jiangshan smart manufacturing, and Sanmen crab wealth loan in 26 counties of the mountainous area of Zhejiang Province.

The balance of "Zhejiang Bank Wealth Loan" products reached 12.242 billion yuan, an increase of 904 million yuan from the beginning of the year, serving 7,315 customers, an increase of 789 from the beginning of the year.

The "deep cultivation of Zhejiang" strategy has achieved obvious results.

Zhitong Finance APP learned from the mid-term performance briefing that the bank takes "deep cultivation of Zhejiang" as the primary strategy, and the market share continues to increase.

Zhejiang Province has a vibrant economy, affluent residents, and strong credit demand, which is a fertile ground for banks to carry out various businesses.

As the only national joint-stock bank with its headquarters in Zhejiang, Zheshang Bank insists on deep cultivation of Zhejiang, deep cultivation of industries, and deep cultivation of customers, adjusts strategies and tactics according to local conditions, and provides support for the high-quality growth of the bank's credit scale.

In the first half of the year, Zheshang Bank's financing service volume in the province exceeded one trillion yuan, reaching 1,048.4 billion yuan, an increase of 13.93% over the end of the previous year, and the balance of various deposits was 547.3 billion yuan, an increase of 2.38% over the end of the previous year.

Serving Zhejiang and serving Zhejiang merchants, Zheshang Bank has always been steadfast.

In terms of optimizing resource allocation, it increases the input of credit resources in Zhejiang Province and focuses on enhancing its contribution to the economic and social development of the province.

In the first half of 2024, the bank's cumulative underwriting of Zhejiang bonds was 17.06 billion yuan, accounting for 9.56% of the issuance volume, ranking first among all banks.

At the same time, closely surrounding the major construction project needs such as "thousands of items and trillions of yuan" in Zhejiang Province, it closely cooperates with provincial development and reform departments and economic information departments, introduces special service plans, and increases support.

As of the end of June, 18 new major projects were put into place, and a total of 65 major provincial projects were served, with a financing balance of 11.1 billion yuan, achieving and exceeding the three-year action target from 2022 to 2024 in advance.

In addition, the bank has achieved full coverage of strategic signings with municipal governments in the province in the past three years.In enhancing financial services, Zheshang Bank has made solid progress in implementing the financial advisory system, promoting the establishment of 90 financial advisory studios across the province, covering 11 cities, serving more than 7,000 enterprises, and helping to secure financing of over 460 billion yuan.

At the same time, the bank has explored new paths for digital financial services, embedding the industrial brain's digital financing model into key aspects of the digital transformation and production operations of "future factories," helping enterprises to fully unleash the value of data.

As of the end of June, 16 industrial brain projects in smart electrical, motor, chemical, and other industries have been implemented, with nearly 300 users connected to the "Industrial Brain + Future Factory" platform, and the total credit amount exceeding 20 billion yuan.

In summary, despite the pressure on revenue in the banking industry in the first half of the year, Zheshang Bank has deeply practiced the concept of "good finance," achieving dual increases in revenue and net profit, steady growth in business scale, and steady progress in operating performance, laying a solid foundation for high-quality development.

In addition, Zheshang Bank has also provided new momentum for future growth by continuously improving its digital financial capabilities and further cultivating the Zhejiang market.

It is worth mentioning that Zheshang Bank has a relatively low valuation.

According to Wind data, the current average PB of the banking industry at the first level is 0.52, while Zheshang Bank's A-share PB is only 0.42, and the Hong Kong stock PB is only 0.31, with an even lower valuation.

Moreover, since its listing, Zheshang Bank has been very generous with dividends.

In the four years since its listing on the A-share market, it has distributed dividends four times, with a total dividend amount of 17.499 billion yuan, a payout financing ratio of 78.29%, an A-share dividend yield of 6.41%, and a Hong Kong stock dividend yield of 8.79%, which deserves the attention of investors.