CM BANK(600036) 长江证券·2025-05-07 02:44Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company's revenue in Q1 2025 decreased by 3.1% year-on-year, while net profit attributable to shareholders fell by 2.1%. However, net interest income increased by 1.9%, and non-interest income grew by 10.6%, with wealth management fee income being a key highlight, growing by 10.5% [2][6]. - The cost of liabilities is declining, with the deposit interest rate decreasing to 1.29% in Q1, reinforcing the company's core advantage of low funding costs [2][6]. - The non-performing loan (NPL) ratio decreased by 1 basis point to 0.94% at the end of Q1, and the provision coverage ratio fell by 2 percentage points to 410% [2][6]. - The new NPL generation rate for Q1 was 1.00%, down by 5 basis points compared to the full year of 2024, primarily due to a significant decline in corporate NPL generation [2][6]. - The core Tier 1 capital adequacy ratio remains the highest in the industry, indicating solid internal growth advantages and significant investment value [2][6]. Summary by Sections Performance - The company's Q1 net interest income growth turned positive, supported by a low base from the previous year and a smaller-than-expected decline in interest margins. Non-interest income decreased by 10.6%, with a 2.5% drop in middle-income sources [12]. - The profit aspect showed a reduction in credit impairment provisions year-on-year, although the cost-to-income ratio and tax rate increased slightly [12]. Scale - Corporate lending drove growth, with loans increasing by 3.4% compared to the beginning of the period, mainly due to a 6.5% increase in corporate loans and a 9.8% rise in bills. Retail loan growth was slower at 0.4% due to a contraction in credit card loans [12]. - Deposits grew by 2.5%, with the proportion of demand deposits remaining stable at 50.5% of the average daily balance in Q1, up 0.1 percentage points from the full year of 2024 [12]. Interest Margin - The net interest margin stood at 1.91%, with a quarterly decline of 3 basis points, which is better than the expected decline of 7 basis points for the full year of 2024. The absolute level of interest margin remains advantageous compared to other large banks [12]. - The loan yield was 3.53%, down 17 basis points, reflecting the impact of repricing and lower rates on new loans [12]. Non-Interest Income - Non-interest income saw a decline of 10.6%, with middle-income sources down by 2.5%. However, wealth management fee income turned positive, growing by 10.5% in Q1, with significant increases in sales of mutual funds and trusts [12]. Asset Quality - The NPL ratio and new NPL generation rate showed improvement, with the new generation rate at 1.00%, down from the previous year. The corporate NPL generation decreased significantly, while retail NPL generation is still on the rise [12]. - The NPL ratio for real estate corporate loans was 4.79%, showing a slight increase but remaining stable overall [12]. Investment Recommendation - The company has a strong capital position with no dilution pressure from refinancing. The core Tier 1 capital adequacy ratio remains stable at 14.9%, the highest in the industry. The expected dividend payout ratio for 2024 is 35% [12]. - The decline in Q1 performance was mainly due to investment income, while core business revenues from interest and wealth management showed positive growth. The company is expected to maintain positive profit and dividend growth for the year [12].