PAB(000001) Dongxing Securities·2024-10-22 00:00Investment Rating - The report maintains a "Strong Buy" rating for Ping An Bank [1][6][7] Core Views - Ping An Bank's revenue continues to face pressure, but net profit shows slight growth due to effective cost management and provisioning [2][7] - The bank is undergoing a structural adjustment in its retail business, focusing on reducing high-risk assets and improving risk management [5][6] - The bank's net interest margin (NIM) is under pressure but shows signs of stabilization due to improving funding costs [6][7] Summary by Sections Revenue Performance - In Q3 2024, Ping An Bank reported revenue of CNY 111.58 billion, a year-on-year decrease of 12.6%, but the decline rate has narrowed compared to the first half of 2024 [2][5] - Net interest income fell by 20.6% year-on-year, while other non-interest income increased by 52.6%, contributing significantly to revenue [2][6] Cost Management - The bank has effectively controlled expenses, with management costs down by 9.8% year-on-year, helping to maintain net profit growth [2][6] - Credit impairment losses decreased by 26.3% year-on-year, supporting the positive net profit growth of 0.2% [2][7] Asset Quality - As of September, the non-performing loan (NPL) ratio was 1.06%, showing a slight improvement, while the coverage ratio remains robust at 251.2% [7][8] - The bank is focusing on improving the quality of its loan portfolio, particularly in the retail sector, where certain segments have shown increased NPL rates [7][8] Future Outlook - The bank's net profit is expected to grow at a compound annual growth rate (CAGR) of 1.0%, 2.5%, and 5.0% from 2024 to 2026, with corresponding book value per share (BVPS) estimates of CNY 23.16, 25.64, and 28.25 [7][8] - The current market price of CNY 11.81 per share reflects a price-to-book ratio of 0.51, indicating potential upside [7][8]