Xin Lang Cai Jing·2025-05-06 10:26Core Viewpoint - The company reported a slight decline in revenue for Q1 2025, but maintained positive growth in net profit and net interest income, indicating stability in its financial performance despite challenges in non-interest income [1][2]. Financial Performance - Q1 2025 revenue growth rate was -1.0%, while net profit growth rate was +1.5% and net interest income growth rate was +2.5% [1]. - Non-interest income decreased by 6.8%, with fee income down by 2.4% [2]. - Credit costs improved, with credit impairment losses down by 12% year-on-year, contributing to net profit growth that outperformed the average of major banks [2]. Scale and Growth - Total assets grew by 2.6% compared to the beginning of the year, with loans increasing by 4.2%, adding 116.9 billion [2]. - Retail loans showed stable growth, particularly in housing, consumer, and business loans, while credit card loans contracted due to seasonal factors [2]. Interest Margin - The net interest margin for Q1 was 1.23%, a decrease of 4 basis points compared to the full year of 2024, but the decline was less than that of peers [3]. - The cost of liabilities improved significantly, with the deposit cost rate down by 21 basis points year-on-year, helping to stabilize the interest margin [3]. Non-Interest Income - Non-interest income saw a decline of 2.4%, but the decrease is expected to stabilize, particularly in wealth management-related fees [3]. - Other non-interest income dropped by 10.6%, primarily due to losses from fair value changes influenced by bond market fluctuations [3]. Asset Quality - The non-performing loan (NPL) ratio decreased by 1 basis point to 1.30%, with a stable provision coverage ratio of 200% [1][4]. - Personal loan NPL ratio increased by 10 basis points to 1.18%, indicating rising risks in retail loans, although the overall impact on total NPL generation is expected to be limited [4]. Investment Outlook - The company is positioned as a stable dividend asset with high dividends and low valuation, projecting a dividend yield of 4.3% for A shares and 5.2% for H shares [4]. - The current price-to-book (PB) ratios for A and H shares are 0.57x and 0.48x, respectively, supporting a "buy" rating [4].