GF SECURITIES·2025-04-30 03:22Investment Rating - The investment rating for the company is "Buy-A/Buy-H" with a current price of 7.27 CNY/5.48 HKD and a reasonable value of 7.29 CNY/5.50 HKD [2]. Core Views - The report highlights that the company has shown a year-on-year increase in both loans and deposits, with a narrowing decline in net fee income. The first quarter of 2025 saw a decrease in revenue, pre-provision operating profit (PPOP), and net profit attributable to shareholders by -3.2%, -3.6%, and -4.0% respectively compared to the previous year [6][8]. Summary by Sections Financial Performance - In Q1 2025, the company's revenue, PPOP, and net profit attributable to shareholders decreased by -3.2%, -3.6%, and -4.0% respectively, with changes from the previous year being -0.69 percentage points, +0.68 percentage points, and -4.50 percentage points [6][9]. - The total assets, loans, and deposits increased by 8.5%, 8.5%, and 4.0% year-on-year respectively, with a loan increment of 1.31 trillion CNY in Q1 2025, accounting for 57.3% of the total annual credit increment for 2024 [6][9]. Asset Quality - The non-performing loan (NPL) ratio at the end of Q1 2025 was 1.33%, a slight decrease from the end of the previous year. The provision coverage ratio improved to 215.70% [6][9]. Income Structure - The net interest margin (NIM) for Q1 2025 was 1.33%, down 9 basis points from the previous year, primarily due to the impact of LPR adjustments and market interest rates [6][9]. - The net fee income decreased by 1.18% year-on-year, but the decline was less severe compared to previous periods [6][9]. Profit Forecast and Investment Recommendation - The forecast for net profit growth for 2025 and 2026 is 0.84% and 2.08% respectively, with earnings per share (EPS) projected at 0.99 CNY and 1.01 CNY. The current stock price corresponds to a price-to-earnings (PE) ratio of 7.32X and 7.16X for 2025 and 2026 [6][9].