HTSC·2025-04-30 07:00Investment Rating - The report maintains a buy rating for the company’s A/H shares [5][8]. Core Views - The company reported a year-on-year decline in net profit and operating income for Q1 2025, with net profit down by 2.6% and operating income down by 0.1% [1]. - The company is experiencing pressure on its net interest margin, which decreased to 1.71%, while non-interest income showed strong growth of 14.8% year-on-year [2][3]. - The company is focusing on cost optimization, which is reflected in the reduction of its cost-to-income ratio to 56.7% [3]. Summary by Sections Financial Performance - For Q1 2025, the company’s annualized ROE and ROA were 11.33% and 0.58%, respectively, both showing a decline compared to the previous year [1]. - The company’s total assets, loans, and deposits grew by 8.3%, 9.8%, and 9.2% year-on-year, respectively [2]. Credit and Asset Quality - The non-performing loan (NPL) ratio was reported at 0.91%, with a provision coverage ratio of 266% [4]. - The company’s NPL generation rate increased to 0.88%, indicating a rise in asset quality concerns [4]. Capital and Valuation - The report estimates the company’s EPS for 2025 at 0.88 RMB, with a projected PB ratio of 0.70 for A shares and 0.64 for H shares [5]. - The target prices are set at 6.29 RMB for A shares and 6.17 HKD for H shares [8][9].