ZHONGTAI SECURITIES·2024-09-02 09:09Investment Rating - The report maintains a "Buy" rating for the company, suggesting a positive outlook for investment opportunities [5]. Core Views - The report highlights that the net interest margin has stabilized and increased, driven by contributions from the liability side, although non-interest income has negatively impacted net profit growth [3][7]. - The company is positioned as a key player in the Yangtze River Delta region, with steady revenue and profit growth, and a commitment to supporting the real economy through active loan allocations [5][7]. Financial Performance Summary - Revenue and Profit Forecasts: The company’s operating income for 2023 is projected at 240,219 million, with a slight decline expected in subsequent years. Net profit is forecasted to be 92,177 million in 2023, with a modest growth rate of 0.6% [3]. - Net Interest Income: In Q2, net interest income increased by 2.7% quarter-on-quarter, with the net interest margin rising by 3 basis points to 1.28% [4][13]. - Loan and Deposit Trends: The bank's loan issuance in Q2 was 645.1 billion, a significant decrease from the previous year. However, personal loans showed a notable increase, particularly in the second quarter [15][18]. - Asset Quality: The bank's non-performing loan ratio remained stable at 1.32%, with a provision coverage ratio increasing to 207.29% [23]. Asset and Liability Management - Loan Structure: The bank's loan structure has shifted, with a focus on infrastructure projects, which accounted for 43.5% of new loans in the first half of 2024. The proportion of personal loans has also increased [15][18]. - Deposit Trends: Total deposits decreased significantly, with a drop of 181.8 billion in Q2. However, savings deposits grew at a rate of 9.5% [16][20]. Non-Interest Income - Non-Interest Income Decline: The report notes a 16.9% year-on-year decline in non-interest income, primarily due to reduced income from agency services and investment banking [21][22]. Investment Recommendations - The report suggests that investors should actively monitor the company, given its strategic positioning and ongoing improvements in asset quality metrics [5][7].