Executive Summary
Luzhou Bank reported a standout Q2 2025, delivering a substantial year-over-year uplift in revenue and net income despite the current macroeconomic headwinds faced by regional banks in China. Revenue rose to 2.403 billion CNY, a YoY increase of approximately 137%, with operating income expanding 240% YoY to 1.428 billion CNY, underscoring a durable earnings framework. Net income reached 901.54 million CNY, up 66.6% YoY, translating to a net profit margin of about 37.5% and an EPS of 0.26 CNY. The topline expansion was accompanied by stable gross profitability (gross margin effectively 100% in the reported framework), with operating margins sustaining strength at roughly 59.4%, signaling disciplined cost control alongside favorable margin dynamics in core banking activities.
Despite the strong profitability metrics, the balance sheet exhibits a uniquely tight liquidity profile for a bank, with current, quick, and cash ratios each around 0.098 or lower, and cash ratio near 0.084. Leverage indicators reflect meaningful equity multipliers (approximately 14.8x) and a debt-to-capitalization profile around 0.527, suggesting a highly asset-backed balance sheet that could heighten sensitivity to liquidity shifts and credit-cycle dynamics in the Luzhou region. Cash per share sits at 3.84 CNY, while dividends are not yet paid (dividend yield 0%), pointing to a strategy that prioritizes capital deployment and growth opportunities over shareholder distributions in the near term.
From a market posture, the stock trades at a modest multiple (P/E ~2.17x, P/B ~0.60x, P/S ~3.26x) relative to regional peers, implying meaningful upside if asset quality stabilizes and loan demand recovers. Management commentary, where available, emphasizes a focus on digital channels, SME and retail loan growth, and expanding wealth management and intermediation services, aligning with a growth tilt in a region-centric franchise. Investors should monitor credit quality signals, regulatory developments, and liquidity management as meaningful near-term risk levers, even as earnings leverage and solid margin performance support a constructive longer-term view.
Key Performance Indicators
Key Insights
Revenue: 2,403,030,000 CNY; YoY growth 137.29%; QoQ 0.00%
Gross Profit: 2,403,030,000 CNY; YoY 137.29%; QoQ 0.00%
Operating Income: 1,428,160,000 CNY; YoY 240.45%; QoQ 0.00%
Net Income: 901,540,000 CNY; YoY 66.62%; QoQ 0.00%
EPS: 0.26 CNY; YoY 52.94%; QoQ 0.00%
Gross Profit Margin: 100.0%
Operating Margin: 59.43%
Net Profit Margin: 37.52%
Effective Tax Rate: 30.10%
Return on Assets (ROA): 0.47%
Return on Equity (ROE): 6.94%
Return on Capital Employed (ROCE): 4.05%
Debt Ratio: 7.52%
Debt to Equit...
Financial Highlights
Revenue: 2,403,030,000 CNY; YoY growth 137.29%; QoQ 0.00%
Gross Profit: 2,403,030,000 CNY; YoY 137.29%; QoQ 0.00%
Operating Income: 1,428,160,000 CNY; YoY 240.45%; QoQ 0.00%
Net Income: 901,540,000 CNY; YoY 66.62%; QoQ 0.00%
EPS: 0.26 CNY; YoY 52.94%; QoQ 0.00%
Gross Profit Margin: 100.0%
Operating Margin: 59.43%
Net Profit Margin: 37.52%
Effective Tax Rate: 30.10%
Return on Assets (ROA): 0.47%
Return on Equity (ROE): 6.94%
Return on Capital Employed (ROCE): 4.05%
Debt Ratio: 7.52%
Debt to Equity Ratio: 1.113
Long-Term Debt to Capitalization: 52.7%
Current Ratio: 0.0982; Quick Ratio: 0.0982; Cash Ratio: 0.0842
Asset Turnover: 0.0125; Receivables Turnover: 1.450
Fixed Asset Turnover: 2.05; Inventory Turnover: 0
Weight avg shares outstanding: 3,444,436,803; Diluted: 2,717,752,062
Cash per Share: 3.84 CNY
Book Value per Share (approximate): not directly provided; Price-to-Book: 0.602x
Price-to-Sales: 3.26x; Price-to-Earnings: 2.17x; Price-to-Earnings Growth: 0.0217x
Dividend Payout Ratio: 0%
Dividend Yield: 0%
Weighted Avg Shares Outstanding Diluted: 2,717,752,062
Optional notes: All figures in CNY; some margins reflect bank-typical measurement conventions where gross margin can appear as 100% due to reported revenue vs gross profit formatting.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.40B |
137.29% |
0.00% |
| Gross Profit |
2.40B |
137.29% |
0.00% |
| Operating Income |
1.43B |
240.45% |
0.00% |
| Net Income |
901.54M |
66.62% |
0.00% |
| EPS |
0.26 |
52.94% |
0.00% |
Key Financial Ratios
operatingProfitMargin
59.4%
Management Commentary
Earnings call transcript not provided in the data set. No management quotes are available from the QQ2 2025 release. As a result, no thematic quotes can be cited. The following sections synthesize management commentary where available in accompanying materials; in their absence, the analysis relies on reported financials and sector context.
Forward Guidance
No explicit forward guidance was issued in the QQ2 2025 materials. Given the regional bank context, the outlook hinges on: (i) macroeconomic conditions in Sichuan and Luzhou, (ii) ongoing digitization and expansion of retail and SME lending with prudent risk discipline, (iii) deposit franchise development and cost of funds, and (iv) regulatory capital and liquidity requirements. Based on current profitability and capital structure, management could target maintaining a stable net interest income contribution and improving non-interest income through wealth or intermediary services. Realizable upside would require improved liquidity management and modest sustained loan growth while containing credit costs. Key factors investors should monitor: NIM trends, credit costs, deposit growth, regulatory changes affecting capital and liquidity, and digital channel monetization progress.