Jinwu Financial News | According to BOC International Development Research Report, Bank of Commerce (09923)'s revenue in the first half of the year was 1.6 billion yuan (RMB, same below), down 23% year on year, and adjusted net profit (excluding the impact of non-recurring revenue adjustments) fell 29% year on year to 0.16 billion yuan, mainly due to the decline in the scale of payment transactions. The number of payment transactions was stable year over year, and the transaction size was mainly affected by the decline in the single amount. Excluding the impact of non-recurring revenue adjustments, the payment rate remained stable at 0.123% month-on-month. Business restructuring led to year-on-year optimization of gross margin of merchant solutions/in-store e-commerce businesses. Merchant solution revenue increased 21% year over year, and merchant structure optimization led to average payment of +15% year over year.
The bank expects a marginal improvement in the single payment amount. The scale of payments may resume month-on-month growth in the second half of the year. Short-term payment rates may be relatively stable, and there is still room for improvement in rates driven by the volume of overseas payment business over the long term.
The bank switched the valuation to 2025, and fine-tuned the target price to HK$13 (previously HK$14), based on comparable payment and SaaS companies' price-earnings ratio of 14 times in 2025, maintaining a neutral rating. The company accelerated the expansion of overseas payments and merchant services. Singapore paid GPV +50% in the first half of the year. It is expected to maintain rapid growth in the second half of the year. The incremental revenue and profit contributions are expected to be gradually released, or become the company's next growth point.
