PAB(SZ:000001) Huachuang Securities·2024-10-20 14:38Investment Rating - The report maintains a "Recommend" rating for Ping An Bank, with a target price of 13.5 CNY, compared to the current price of 12.04 CNY [2][4]. Core Insights - The bank's operating income for the first three quarters of 2024 was 111.582 billion CNY, a year-on-year decrease of 12.6%, while the net profit attributable to shareholders was 39.729 billion CNY, a slight increase of 0.24% [2]. - The non-performing loan (NPL) ratio stands at 1.06%, with a provision coverage ratio of 251%, reflecting a decrease of 13 percentage points [2]. - The bank is actively adjusting its asset structure, leading to a slowdown in growth and a decline in interest margins, but cost reduction and efficiency improvements have helped maintain positive profit growth [2][5]. Summary by Sections Financial Performance - In Q3 2024, the net interest income decreased by 18.4% year-on-year, contributing to an overall revenue decline of 11.7% [2]. - Non-interest income saw a significant increase of 41.8% year-on-year, primarily due to favorable bond market investments [2]. - The cost-to-income ratio improved slightly, decreasing by 0.36 percentage points to 27.48% [2]. Asset Quality - The bank's asset structure continues to be optimized, with a focus on reducing low-yield notes and high-risk assets, resulting in a 4.4% year-on-year growth in interest-earning assets [2]. - The NPL generation rate for Q3 2024 was 1.97%, showing a decrease of 21 basis points [5]. Loan and Investment Trends - Retail loans experienced a negative growth of 12.7%, while corporate loans showed a modest increase of 3.2% [2]. - The bank has increased its bond investments significantly, with a year-on-year growth of 18.4% in this area [2]. Future Outlook - The report anticipates that the bank's net profit growth will be modest, with projections of 0.6%, 1.0%, and 1.4% for 2024, 2025, and 2026 respectively [4][6]. - The bank is expected to continue its focus on asset quality improvement and shareholder returns, including a planned 20% interim dividend [5].