GF SECURITIES·2024-08-29 01:40Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company [4]. Core Insights - The company reported a decline in revenue, PPOP, and net profit attributable to shareholders for the first half of 2024, with year-on-year changes of -3.5%, -6.3%, and -1.6% respectively. This represents a slowdown compared to the first quarter of 2024 [3]. - Key positive factors include growth in personal loans and a rebound in net interest margin, while challenges include a contraction in asset size and pressure on non-interest income [3]. Summary by Relevant Sections Financial Performance - For the first half of 2024, the company experienced a revenue decline of 3.5%, PPOP down 6.3%, and net profit down 1.6% compared to the previous year. The growth rates have decreased by 3.48 percentage points, 6.47 percentage points, and 3.07 percentage points respectively from the first quarter of 2024 [3]. - The company’s net interest margin improved to 1.29% in the first half of 2024, up 2 basis points from the first quarter of 2024 and 1 basis point from the full year of 2023 [3]. Loan and Deposit Growth - As of the end of the second quarter of 2024, total loans grew by 6.1% year-on-year, with retail loans increasing by 5.8%. The growth in personal loans was driven by consumer and business loans, while mortgage loans remained weak [3]. - The company’s deposits saw a year-on-year growth of 2.4% as of the end of the second quarter of 2024, with a significant reduction in deposits of 29.8 billion yuan in the second quarter due to manual interest adjustments [3]. Asset Quality - The non-performing loan (NPL) ratio remained stable at 1.32% as of the end of the second quarter of 2024, with a slight increase in personal loan NPLs by 8 basis points [3]. - The provision coverage ratio improved to 204.82%, up 7.8 percentage points from the previous quarter, indicating a stronger buffer against potential loan losses [3]. Profitability Forecast - The forecast for net profit growth for 2024 and 2025 is 0.1% and 2.0% respectively, with expected EPS of 1.15 and 1.17 yuan per share. The current stock price corresponds to a PE ratio of 6.91X for 2024 and 6.76X for 2025, and a PB ratio of 0.60X for 2024 and 0.57X for 2025 [3].