EBSCN·2024-10-31 09:48Investment Rating - The report maintains a "Buy" rating for Agricultural Bank of China (601288.SH) with a current price of 4.71 CNY [1]. Core Views - The report highlights that Agricultural Bank of China has achieved stable growth in both revenue and profit, with a year-on-year revenue increase of 1.3% and a net profit increase of 3.4% for the first three quarters of 2024 [4][5]. - The bank's net interest margin (NIM) has stabilized at 1.45%, and the cost control measures on liabilities have shown effectiveness [8][11]. - The bank's non-interest income has increased by 2.7% year-on-year, contributing to 19% of total revenue [9]. Summary by Sections Financial Performance - For the first three quarters of 2024, Agricultural Bank reported revenue of 540.2 billion CNY and a net profit of 214.4 billion CNY, with respective year-on-year growth rates of 1.3% and 3.4% [4]. - The annualized weighted average return on equity (ROAE) stands at 10.79%, a decrease of 0.6 percentage points year-on-year [4]. Revenue and Profit Growth - Revenue and profit growth have accelerated, with revenue growth of 1.3%, pre-provision profit growth of 1.5%, and net profit growth of 3.4%, all showing improvements compared to the first half of 2024 [5]. - The growth in net interest income and non-interest income was 1% and 2.7%, respectively, both higher than the previous half [5]. Asset and Loan Growth - As of the end of Q3 2024, the bank's interest-earning assets and loans grew by 12.9% and 10.5% year-on-year, respectively [5]. - The bank's loan structure shows significant growth in key sectors, with manufacturing, green finance, and inclusive small and micro loans increasing by 12.6%, 22.1%, and 29.1% year-on-year [6]. Deposit Growth and Management - The growth rate of interest-bearing liabilities and deposits was 13.1% and 3.3%, respectively, with a decrease in deposit growth compared to the previous half [7]. - The bank's ability to manage customer funds has improved, with a significant increase in personal deposits [7]. Non-Interest Income - Non-interest income reached 102.4 billion CNY, with a year-on-year growth of 2.7%, and accounted for 19% of total revenue [9]. - The main driver of non-interest income growth was the increase in net other non-interest income, which grew by 23.6% year-on-year [9]. Asset Quality and Risk Management - The non-performing loan (NPL) ratio and attention rate remained stable at 1.32% and 1.42%, respectively, indicating solid asset quality [10]. - The bank's provision coverage ratio is at 302.4%, reflecting a robust risk mitigation capability [10]. Capital Adequacy - As of Q3 2024, the core tier 1 capital ratio, tier 1 capital ratio, and total capital ratio were 11.4%, 13.5%, and 18.1%, respectively, indicating a strong capital buffer [11][18]. - The bank has issued 50 billion CNY in TLAC non-capital bonds to support regulatory compliance and optimize funding costs [11]. Earnings Forecast and Valuation - The earnings per share (EPS) forecasts for 2024-2026 have been adjusted to 0.80, 0.85, and 0.89 CNY, with corresponding price-to-book (PB) ratios of 0.63, 0.58, and 0.54 [12][13]. - The report maintains a "Buy" rating based on the bank's stable low-cost deposit expansion and growth in key lending areas [12].