BANK OF CHINA(601988) Huaxin Securities·2025-05-09 00:23Investment Rating - The report assigns a "Buy" rating for the company [9] Core Insights - The company's revenue growth has improved, with a year-on-year increase of 2.6% in Q1 2025, which is an acceleration of 1.4 percentage points compared to 2024 [4] - The net profit attributable to shareholders decreased by 2.9% year-on-year in Q1 2025, primarily due to an increase in the effective tax rate to 20%, up by 3.5 percentage points [4] - Total assets grew by 6.9% year-on-year to 36 trillion yuan, with deposits increasing by 6.2% to 25.6 trillion yuan and loans rising by 8.3% to 22.6 trillion yuan [5] - The net interest margin decreased by 11 basis points to 1.29% in Q1 2025, influenced by a larger decline in asset yield compared to the improvement in liability costs [6] - Non-interest income saw a significant increase of 18.9% year-on-year, with other non-interest income rising by 37.3% [7] - Asset quality remained stable, with a non-performing loan ratio of 1.25% and a provision coverage ratio of 198% [8] - The forecast for net profit attributable to shareholders for 2025-2027 is 2404 billion, 2453 billion, and 2477 billion yuan respectively, with corresponding EPS of 0.82, 0.83, and 0.84 yuan [9] Summary by Sections Financial Performance - In Q1 2025, the company achieved a revenue of 1649.3 billion yuan, with a year-on-year growth of 2.6% [3] - The net profit for Q1 2025 was 543.6 billion yuan, reflecting a decrease of 2.9% compared to the previous year [3] Revenue and Profitability - The effective tax rate increased to 20% in Q1 2025, impacting profit growth negatively [4] - The company’s total assets reached 36 trillion yuan, with a year-on-year growth of 6.9% [5] Loan and Deposit Growth - Deposits grew to 25.6 trillion yuan, marking a 6.2% increase, while loans reached 22.6 trillion yuan, up by 8.3% [5] Interest Margin and Non-Interest Income - The net interest margin decreased to 1.29%, with asset yield declining more than liability costs improved [6] - Non-interest income increased by 18.9%, with significant growth in other non-interest income [7] Asset Quality - The non-performing loan ratio remained stable at 1.25%, with a provision coverage ratio of 198% [8] Profit Forecast - Projected net profits for 2025-2027 are 2404 billion, 2453 billion, and 2477 billion yuan, with EPS estimates of 0.82, 0.83, and 0.84 yuan [9]