SRCB(SH:601825) Huachuang Securities·2024-10-28 09:11Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 8.64 CNY, compared to the current price of 7.90 CNY [1]. Core Views - The company has shown a rebound in performance in Q3 2024, with operating income reaching 20.48 billion CNY, a year-on-year increase of 0.34%. The net profit attributable to the parent company was 10.49 billion CNY, up 0.81% year-on-year [1]. - The asset quality remains stable, with a non-performing loan ratio holding steady at 0.97% and a provision coverage ratio decreasing by 7.4 percentage points to 365% [1]. - The report indicates that the low point of annual performance has passed, with revenue and profit growth rates recovering in the first three quarters of 2024. The growth in retail loans has shown signs of improvement, particularly in mortgage loans, which have returned to positive growth [1]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved operating income of 20.48 billion CNY, with a growth rate of 0.34% year-on-year. The net profit attributable to the parent company was 10.49 billion CNY, reflecting a year-on-year increase of 0.81% [1][2]. - The Q3 2024 revenue growth rate was 0.58%, an increase of 3.7 percentage points compared to the previous quarter, driven by improved investment income from the bond market and a recovery in retail loan demand [1]. Asset Quality - The non-performing loan ratio remained stable at 0.97%, with a slight decrease in the provision coverage ratio to 365%. The report notes a marginal improvement in risk indicators, with the non-performing loan generation rate decreasing to 0.63% [1][3]. - The report highlights that the company’s management has shown confidence in future growth by increasing their shareholdings [1]. Future Outlook - The company is expected to see a gradual recovery in credit demand as the economy stabilizes and mortgage rates decrease. The projected revenue growth rates for 2024E-2026E are 0.9%, 1.7%, and 5.5%, respectively [1][2]. - The report emphasizes the company's solid customer base and stable business development, particularly in sectors like technology innovation and pension finance, which are seen as areas of competitive advantage [1].