ICBC(601398)2024-09-01 02:00Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Insights - Revenue is under pressure, but the decline in net profit shows marginal improvement. In H1 2024, the company achieved operating revenue of CNY 401.99 billion, a year-on-year decrease of 6.03%. The net profit attributable to shareholders was CNY 170.47 billion, down 1.89% year-on-year, with a weighted average ROE of 9.53%, a decrease of 0.98 percentage points year-on-year [2][18][23]. Financial Performance Summary - As of June 30, 2024, the company's non-performing loan (NPL) ratio was 1.35%, a decrease of 1 basis point from the previous quarter and year-end. The proportion of special mention loans increased by 7 basis points to 1.92% compared to the end of the previous year. The corporate loan NPL ratio was 1.69%, down 12 basis points, while the retail loan NPL ratio rose by 20 basis points to 0.9% [5][19]. - The company’s provision coverage ratio stood at 218.43%, an increase of 2.12 and 4.46 percentage points from the previous quarter and year-end, respectively, indicating improved risk resistance [5][19]. Revenue and Profitability - In H1 2024, net interest income was CNY 313.95 billion, down 6.84% year-on-year, with a net interest margin (NIM) of 1.43%, decreasing by 5 and 18 basis points from the previous quarter and year-end, respectively. The yield on interest-earning assets was 3.28%, down 17 basis points from the year-end [35][44]. - The company’s total loans grew by 6.71% year-on-year, primarily driven by corporate loans, which increased by 8.49%. Retail loans saw a modest growth of 2.09% [35][44]. Non-Interest Income and Wealth Management - Non-interest income for H1 2024 was CNY 106.55 billion, a year-on-year decrease of 3.58%. The company maintained a leading position in wealth management, with retail AUM reaching CNY 21.77 trillion, up 5.12% from the previous year-end [36][75]. Investment Recommendations - The company is one of the state-owned major banks, leading in scale and market share, with a diversified business structure and strong operational resilience. The report recommends a "Buy" rating based on the company's fundamentals and stock price elasticity, projecting BVPS for 2024-2026 at CNY 10.18, CNY 10.91, and CNY 11.68, respectively, corresponding to current PB ratios of 0.59X, 0.55X, and 0.51X [37][82].