ZHONGTAI SECURITIES·2024-09-02 10:03Investment Rating - The report maintains a "Buy" rating for the company, suggesting a positive outlook for investment opportunities [5]. Core Insights - The bank's net interest income increased by 2.7% quarter-on-quarter, driven by a stabilization in net interest margin, although non-interest income has negatively impacted net profit growth [3][7]. - The bank's asset quality remains stable, with provisions increasing, and the non-performing loan ratio holding steady at 1.32% [23]. - The bank's loan growth is primarily focused on infrastructure projects, with a notable increase in personal loans, while deposit levels have seen a significant decline [15][16]. Summary by Sections Financial Performance - Total revenue for 2023 is projected at 240,219 million, with a slight decline of 0.9% year-on-year [3]. - Net profit for 2023 is estimated at 92,177 million, reflecting a modest growth of 0.6% year-on-year [3]. - Earnings per share (EPS) is expected to be 0.99, with a return on equity (ROE) of 10.53% [3]. Net Interest Income - In Q2, net interest income rose by 2.7%, with the net interest margin increasing by 3 basis points to 1.28% [4][13]. - The asset yield decreased by 5 basis points to 3.41%, while the liability cost fell by 8 basis points to 2.24% [4][13]. Loan and Deposit Growth - In Q2, the bank's loan issuance totaled 645.1 billion, a decrease of 497.9 billion year-on-year, with a focus on personal loans [15]. - The bank's total deposits decreased by 1818.5 billion in Q2, with a significant drop in corporate deposits [16][20]. Asset Quality - The non-performing loan ratio remained stable at 1.32%, with a slight increase in the overdue rate to 1.45% [23]. - The provision coverage ratio improved to 207.29%, indicating a stronger buffer against potential loan losses [23]. Non-Interest Income - Non-interest income saw a significant decline of 16.9% year-on-year, primarily due to reduced income from agency services and investment banking [21][22]. - The bank's fee income from various services, including credit card and investment banking, experienced substantial drops [21][22]. Investment Recommendations - The report suggests that the bank's valuation metrics, such as price-to-earnings (P/E) and price-to-book (P/B) ratios, indicate an attractive investment opportunity, with P/B ratios projected at 0.54X for 2024 [5].