HTSC·2025-04-30 08:10Investment Rating - The investment rating for the company is "Buy" for both A and H shares, maintaining the previous rating [9]. Core Views - The company reported a year-on-year decline in net profit and operating income of 4.0% and 3.2% respectively for Q1 2025, with annualized ROE and ROA decreasing by 1.00 percentage points and 0.09 percentage points to 9.06% and 0.68% respectively. Despite short-term pricing pressure, credit issuance remains stable, and asset quality is steady, reinforcing the company's leading position [2][3]. Summary by Sections Credit and Asset Quality - As of March 2025, total assets, loans, and deposits grew by 8.3%, 8.5%, and 4.0% respectively compared to the end of 2024. The company issued new loans totaling 1.31 trillion yuan, with corporate loans accounting for 85% and retail loans for 14% [3]. - The non-performing loan (NPL) ratio and provision coverage ratio stood at 1.33% and 216% respectively, showing stability compared to the end of 2024. The retail financial NPL ratio saw a slight increase, but the pace of growth has slowed [5]. Income and Expenses - Non-interest income decreased by 4.2% year-on-year in Q1 2025, primarily due to a slowdown in other non-interest income, which fell by 10.4% due to market fluctuations. Fee income accounted for 18.3% of total revenue, with the company focusing on growth in clearing, settlement, payment, and custody services [4]. - The cost-to-income ratio increased by 1.2 percentage points to 22.0%, maintaining a favorable level [4]. Profitability and Valuation - The company forecasts EPS for 2025, 2026, and 2027 to be 1.03, 1.06, and 1.10 yuan respectively, with a target price of 8.76 yuan for A shares and 6.71 HKD for H shares, reflecting a target PB of 0.80 and 0.57 respectively [6]. - The projected PB for 2025 is 0.66 for A shares and 0.46 for H shares, with the company expected to enjoy a valuation premium due to its leading position [6].