Tianfeng Securities·2024-09-06 08:11Investment Rating - The report maintains a "Buy" rating for the company with a target price of 39.76 CNY, representing a 27% upside from the current price of 31.2 CNY [5][3]. Core Views - The company's revenue and net profit decline have shown marginal improvement, with interest income stabilizing and investment income continuing to grow significantly [7][3]. - The asset quality remains stable with a low non-performing loan ratio of 0.94% and a high provision coverage ratio of 434.4% [18][2]. Revenue and Profitability - In the first half of 2024, the company achieved revenue of 1,729 billion CNY, a year-over-year decline of 3.09%, which is an improvement from the 4.65% decline in the first quarter [1][7]. - Net interest income was 1,044 billion CNY, down 4.17% year-over-year, while non-interest income was 685 billion CNY, down 1.39% [1][7]. - The net interest margin decreased to 2.00%, but the downward trend has slowed compared to the previous quarter [11][12]. Asset and Liability Management - Total interest-earning assets reached 116,597 billion CNY, up 4.9% from the beginning of the year, with corporate loans growing by 6.6% [2][15]. - The average cost of interest-bearing liabilities decreased slightly to 1.72%, with a deposit average cost rate of 1.60%, down 2 basis points from the beginning of the year [11][16]. Investment Income - Investment income has become a new growth point for the company, with other non-interest income increasing by 34.84% year-over-year, primarily driven by investment net income of 195 billion CNY, which grew by 57.21% year-over-year [1][13]. Asset Quality - The non-performing loan balance was 634 billion CNY, with a non-performing loan ratio of 0.94%, showing a slight decrease from the previous year [18][19]. - The company maintains a high provision coverage ratio, ensuring a strong safety margin against potential loan losses [18][19]. Shareholder Changes - The fifth largest shareholder, Hong Kong Central Clearing Limited, increased its stake by 0.29% to 4.93% of the total share capital, while China Securities Finance Corporation became the new tenth largest shareholder with a 2.08% stake [20].