Huachuang Securities·2024-10-30 08:16Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 48.52 CNY based on a current price of 38.60 CNY [1][2]. Core Views - The company's performance shows a gradual improvement in revenue decline, with a reported operating income of 252.709 billion CNY for the first three quarters of 2024, reflecting a year-on-year decrease of 2.91% [1]. - The net profit attributable to shareholders for the same period was 113.184 billion CNY, down 0.62% year-on-year, indicating a narrowing of negative growth [1]. - The net interest margin for Q3 2024 was reported at 1.97%, with a non-performing loan ratio of 0.94% and a provision coverage ratio of 432.15% [1]. Summary by Relevant Sections Financial Performance - The company experienced a continued contraction in revenue, with net interest income and non-interest income showing year-on-year declines of 3.07% and 16.90%, respectively, while other non-interest income increased by 28.23% [1]. - Q3 2024 saw a net interest income of 52.85 billion CNY, reflecting a quarter-on-quarter increase of 0.76% [1]. - The cost control measures have led to a reduction in credit impairment losses by 8.55% year-on-year, and management expenses decreased by 4.56% [1]. Asset Quality - The non-performing loan ratio remained stable at 0.94%, with a slight increase in the proportion of special mention loans to 1.30% [1]. - The company reported a non-performing loan generation rate of 1.02% for Q3, which is still considered low [1]. Credit and Deposits - The company maintained stable growth in credit, with a total new loan issuance of 10.95 billion CNY in Q3 2024, although retail demand remains weak [1]. - The proportion of loans in interest-earning assets slightly decreased to 58.7%, while the proportion of deposits in interest-bearing liabilities remained stable at 86.4% [1]. Future Outlook - The report anticipates a gradual recovery in the company's performance, with adjusted net profit growth rates for 2024E, 2025E, and 2026E projected at -0.3%, -0.2%, and 4.2%, respectively [2]. - The target price reflects a price-to-book ratio of 1.10X for 2025, indicating confidence in the company's long-term value [2].