2024-10-31 06:42Investment Rating - The report assigns a 2024E P/B of 0.5x and a 2024E P/E of 6.0x, with a TTM dividend yield of 5.2%, compared to industry averages of 0.6x, 5.4x, and 4.8% respectively [1][4]. Core Insights - The Bank of Communications reported a Q3 2024 revenue increase of 3.3% year-on-year, with pre-provision profit also rising by 3.3% year-on-year, and net profit attributable to the parent company growing by 1.2% year-on-year [1][4]. - For the first three quarters of 2024, revenue decreased by 1.4% year-on-year, pre-provision profit fell by 3.5%, and net profit attributable to the parent company decreased by 0.7%, indicating improvements in year-on-year growth rates compared to mid-year [1][4]. - The annualized ROA for Q1-Q3 2024 decreased by 0.04 percentage points to 0.65%, while the annualized ROE decreased by 0.77 percentage points to 9.06% [1][4]. - The core Tier 1 capital adequacy ratio increased by 0.31 percentage points year-on-year to 10.29% [1][4]. Summary by Sections Revenue and Profitability - Q1-Q3 2024 net interest income increased by 2.2% year-on-year, consistent with Q2's performance, while Q3 net interest income rose by 2.0% year-on-year [2][5]. - The net interest margin for Q1-Q3 2024 was 1.28%, showing a decline of 1 basis point compared to the first half of 2024 [2][5]. - The cost-to-income ratio for Q1-Q3 2024 was 30.4%, an increase of 0.2 percentage points year-on-year [3][5]. Asset Quality - The non-performing loan ratio remained stable quarter-on-quarter at 1.32%, with both the attention rate and overdue rate declining [3][5]. - The provision coverage ratio slightly decreased to 203.9% [3][5]. - Corporate loans became the main driver of loan growth, contributing 47% to the incremental loan growth in Q3 [2][5]. Fee and Commission Income - Net fee and commission income for Q1-Q3 2024 decreased by 14.0% year-on-year, showing slight improvement from a decline of 14.6% at mid-year [3][5]. - Other net income increased due to fair value changes, rising by 800 million [3][5].