EPS of $0.30 increased by 321.9% from previous year
Gross margin of 100.0%
Net income of 1.81B
"Transcript not provided in the dataset." - N/A
Bank of Tianjin Co Ltd (1578.HK) QQ2 2025 Results Analysis – Revenue Growth Fueled by Non-Interest Income with Modest Core Profitability and Systemic Leverage Considerations
Executive Summary
Bank of Tianjin reported Q2 2025 results with revenue of 3.776 billion CNY and a net income of 1.809 billion CNY. The standout feature of the quarter is the unusually large contribution from total other income (1.832 billion CNY), which elevates net income and margins but also signals a heavily outsized non-operating income component. Core operating profitability is modest: operating income stood at 32.99 million CNY with an operating margin of approximately 0.87%, while net profit margin registered 47.88% on a reported basis due to the one-off-like income line. YoY, revenue and net income both surged (revenue +106% YoY; net income +319%), but this is largely attribution to the non-operating income line rather than a demonstrable improvement in core banking profitability.
From a balance-sheet and liquidity perspective, the firm exhibits a tight liquidity profile with a current ratio of 0.161 and a cash ratio of 0.155, suggesting potential funding and short-term liquidity pressures in a stress scenario. Leverage is elevated (debt ratio 0.154; debt/equity 2.15; long-term debt to capitalisation 0.683; equity multiplier ~14x), which implies higher sensitivity to funding costs and regulatory capital requirements in a rising-rate environment. The stock remains inexpensive on traditional multiples (P/B ~0.20x; P/E ~1.90x) and offers a dividend yield of about 5.9%, supporting income-centric investors even as earnings quality requires closer scrutiny.
Looking ahead, management commentary (where available) and industry dynamics suggest that sustained upside will depend on improving net interest income, growing fee-based income, and maintaining prudent credit quality while managing funding costs. Investors should monitor core profitability trends, liquidity indicators, and any changes to capital adequacy to assess the sustainability of the reported earnings surge.
Key Performance Indicators
Revenue
3.78B
QoQ: 0.00% | YoY:106.29%
Gross Profit
3.78B
1.00% margin
QoQ: 0.00% | YoY:106.29%
Operating Income
32.99M
QoQ: 0.00% | YoY:-90.86%
Net Income
1.81B
QoQ: 0.00% | YoY:319.18%
EPS
0.30
QoQ: 0.00% | YoY:321.94%
Revenue Trend
Margin Analysis
Key Insights
Revenue: 3,776,342,000 CNY for Q2 2025, YoY growth 106.29%; QoQ growth 0.00% (per reported metrics). Gross profit equals revenue, yielding a gross margin of 1.0000, suggesting that much of the current earnings leverage is from non-operating items rather than core banking activities.
Operating income: 32,992,000 CNY with an operating margin of 0.87%; YoY operating income change was -90.86% (large swing driven by composition of income rather than operating efficiency).
Net income: 1,808,068,000 CNY, up 319.18% YoY; net profit margin 47.88%. The substantial net income is dominated by total other income (1,832,166,000 CNY).
Earnings per share (EPS): 0.30 CNY, unchanged on a diluted basis (EPS Diluted 0.30). Weighted average shares ~6.07 billion.
General and administrative expenses: 6,732,360,000 CNY; Selling and marketing expenses: 3,070,114,000 CNY; Selling, general and administrative expenses: 3,743,350,000 CNY; Combined operating expenses: 3,743,350,000 CNY; Operating expenses to revenue ratio reflects near-total expense alignment with revenue (operating expense margin ~99%).
Financial Highlights
Revenue and profitability
- Revenue: 3,776,342,000 CNY for Q2 2025, YoY growth 106.29%; QoQ growth 0.00% (per reported metrics). Gross profit equals revenue, yielding a gross margin of 1.0000, suggesting that much of the current earnings leverage is from non-operating items rather than core banking activities.
- Operating income: 32,992,000 CNY with an operating margin of 0.87%; YoY operating income change was -90.86% (large swing driven by composition of income rather than operating efficiency).
- Net income: 1,808,068,000 CNY, up 319.18% YoY; net profit margin 47.88%. The substantial net income is dominated by total other income (1,832,166,000 CNY).
- Earnings per share (EPS): 0.30 CNY, unchanged on a diluted basis (EPS Diluted 0.30). Weighted average shares ~6.07 billion.
Cost structure and margins
- General and administrative expenses: 6,732,360,000 CNY; Selling and marketing expenses: 3,070,114,000 CNY; Selling, general and administrative expenses: 3,743,350,000 CNY; Combined operating expenses: 3,743,350,000 CNY; Operating expenses to revenue ratio reflects near-total expense alignment with revenue (operating expense margin ~99%).
- EBITDA: not disclosed; EBIT margin is minimal given the reported operating income.
Liquidity and leverage
- Current ratio: 0.161; Quick ratio: 0.161; Cash ratio: 0.155 indicating tight near-term liquidity by conventional banking measures.
- Debt metrics: Debt ratio 0.154; Debt to equity 2.15; Long-term debt to capitalization 0.683; Equity multiplier ~13.99 indicating sizable financial leverage.
- Cash per share: 15.36; Dividend payout ratio: 0.451; Dividend yield: 5.94%; These imply a high dividend relative to earnings quality risk.
Valuation and efficiency
- Price-to-book: 0.199; Price-to-earnings: 1.899; Price-to-sales: 3.64; Dividend yield 5.94%; These valuations imply a deep discount to book value and earnings, but warrant caution on the durability of reported earnings given the heavy reliance on non-operating income.
- Asset turnover: 0.00391; Receivables turnover: 1.325; These suggest very low operational efficiency relative to better-capitalized peers in the sector.
YoY and QoQ trend highlights
- Revenue YoY: +106.29%; Net income YoY: +319.18%; EPS YoY: +321.94% (driven by the non-operating income line while core profitability remains subdued).
- QoQ changes are largely flat for revenue (0.00% QoQ) and earnings, underscoring limited progression in core activities in the latest quarter.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.78B
106.29%
0.00%
Gross Profit
3.78B
106.29%
0.00%
Operating Income
32.99M
-90.86%
0.00%
Net Income
1.81B
319.18%
0.00%
EPS
0.30
321.94%
0.00%
Key Financial Ratios
currentRatio
0.16
grossProfitMargin
100%
operatingProfitMargin
0.87%
netProfitMargin
47.9%
returnOnAssets
0.19%
returnOnEquity
2.62%
debtEquityRatio
2.15
dividendPayoutRatio
45.1%
priceToBookRatio
0.2
priceEarningsRatio
1.9
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript insights unavailable: The dataset provided includes an earnings transcript field but contains no transcript content. As a result, management quotes and thematic points from an QQ2 2025 call cannot be cited directly. Investors should refer to the company’s QQ2 2025 press release and HKEX submissions for any official commentary on core earnings, fee-based revenue trajectory, and guidance. If a transcript is provided, a synthesis would be organized by themes (strategy, operations, market conditions) with context and significance attached to each quote.
Transcript not provided in the dataset.
— N/A
Transcript not provided in the dataset.
— N/A
Forward Guidance
No explicit forward guidance is included in the provided data. Given the quarterly structure and the large non-operating income contribution observed in QQ2 2025, the near-term outlook will hinge on: (1) stabilizing or expanding net interest income from core lending activities; (2) diversification and sustainability of non-interest income sources; (3) balance sheet liquidity management and funding costs in a potentially tighter liquidity environment; (4) asset quality trends and credit provisioning in a slowing or volatile macro backdrop. Management commentary (if available) should be weighed against a backdrop of regulatory capital considerations and peer-relative performance. Investors should monitor quarterly progression in core NII, fee income, loan growth, NPL trends, and liquidity stress indicators.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
1578.HK Focus
1.00%
0.87%
2.62%
1.90%
1551.HK
1.00%
46.40%
1.45%
4.96%
2016.HK
1.00%
23.60%
0.86%
13.76%
1528.HK
1.00%
-85.30%
-3.12%
-2.27%
6196.HK
1.00%
10.80%
1.10%
7.54%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bank of Tianjin presents an attractive entry point on valuation and dividend yield, but the market should discount earnings quality risk. The QQ2 2025 results show a substantial net income contribution from total other income, which raises questions about sustainability. The investment case hinges on improving core profitability (net interest income and non-interest revenue diversification) and restoring liquidity resilience. If management demonstrates a credible path to expanding NII while maintaining or improving fee income and cost discipline, the stock could re-rate on earnings quality. In the near term, cautious stance is warranted due to liquidity constraints and high leverage, with a tilt toward income generation given the current dividend yield. Monitoring focus areas: core loan growth and NII trajectory, stability of non-interest income, asset quality indicators, and liquidity metrics under varied interest-rate scenarios.
Key Investment Factors
Growth Potential
Low-to-moderate upside potential contingent on sustainable improvements in core net interest income and fee-based revenues. The current period’s earnings are heavily influenced by a large non-operating income line, so medium-term growth depends on re-rating based on demonstrable core profitability and loan growth.
Profitability Risk
Key risks include: (a) sustainability of the large non-operating income component; (b) liquidity risk given a very low current/quick/cash ratios; (c) high financial leverage and sensitivity to funding costs; (d) potential regulatory capital and credit risk headwinds in a slowing Chinese economy; (e) earnings volatility from one-off items and market-driven valuation changes.
Financial Position
Financially leveraged with a relatively thin liquidity cushion. Extremely low liquidity ratios combined with high debt-to-equity imply sensitivity to funding costs and macro shocks. On the upside, the stock offers a high dividend yield (≈5.94%), which may attract income-focused investors, albeit with caveats on earnings quality.
SWOT Analysis
Strengths
Low valuation multiples relative to capital markets peers (P/B ~0.20x, P/E ~1.90x) which may imply upside via multiple re-rating.
Attractive dividend yield (~5.9%) which can support total return for income-focused investors.
Net income for the quarter benefited from a substantial non-operating income line, resulting in a strong reported bottom line.
Weaknesses
Core operating profitability is very modest (operating margin ≈ 0.87%), indicating weak underlying performance from banking activities.
Bank of Tianjin Co Ltd (1578.HK) QQ1 2025 Results – Modest Top-Line Growth with Leverage-Driven Balance Sheet Dynamics in a Chinese Regional Banking...