$Bread Financial (BFH.US)$The accounting rules should have b...
$Bread Financial(BFH.US$The accounting rules should have been changed in 2019; the main thing is to look at data for the past 4 years. Revenue declined in 2020 and 2021, grew 18.4% in 2022, net profit fell 23% in 2020, surged 2.7 times in 2021, and returned to 2020 levels in 2022.
Revenue is based solely on net interest income. The vast majority is loan interest income. The non-interest portion is expenses. Credit loss reserves fluctuated greatly. The sharp increase in net profit in 2021 was mainly due to reserves being nearly 1 billion dollars less than usual; otherwise, 2021 would probably have been a loss.
The average net profit for the past 4 years was 380 million.
The balance ratio has declined from 94% to 91.1% in the past 4 years. The total assets of 25.4 billion yuan mainly consist of 18.9 billion net loans and 3.9 billion dollars in cash, and total liabilities of 23.1 billion yuan are mainly composed of 13.8 billion customer deposits and 8.1 billion long-term loans. The 3.9 billion cash has a certain risk of being overrun against the 13.8 billion deposit.
Currently, the price-earnings ratio is 6.6, and the net price-earnings ratio is 0.65, but goodwill and other intangible assets are 800 million, accounting for 35% of net assets of 2.65 billion. After excluding, the net market ratio is 1, which is not much underestimated, and not very attractive.
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