NJBK(SH:601009) HTSC·2025-06-05 10:19Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 12.82 [8]. Core Insights - The company is expected to see steady growth in credit, with a year-on-year increase anticipated, although retail demand and risk improvement trends still need observation [1]. - The bank is approaching a peak in deposit repricing, leading to continuous optimization of liability costs [1]. - The conversion of convertible bonds is expected, which will solidify the company's capital base [1]. Summary by Sections Credit and Asset Quality - In 2024 and Q1 2025, the company's loans increased by 14.3% and 14.7% year-on-year, with new loans amounting to RMB 157.3 billion and RMB 89.7 billion respectively [2]. - The asset quality remains stable, with a non-performing loan (NPL) ratio holding steady at 0.83% in Q1 2025 [2]. Interest Costs and Performance - The net interest income in Q1 2025 rose by 17.8% year-on-year, with a measured interest margin improvement of 6 basis points compared to 2024, primarily due to reduced liability costs [3]. - The company's revenue and net profit growth rates were 6.5% and 7.1% respectively, indicating a favorable position compared to peers [3]. Strategic Direction and Convertible Bonds - The new chairman has invigorated the bank's reform momentum, establishing a clear strategic path focused on reducing cost-to-income ratios and enhancing asset quality management [4]. - As of June 4, 2025, the bank's convertible bonds reached a conversion price, with an unconverted balance of RMB 5.7 billion, representing 6% of the market capitalization [4]. Profit Forecast and Valuation - The forecasted net profit for 2025-2027 is RMB 21.8 billion, RMB 23.7 billion, and RMB 26.1 billion, with year-on-year growth rates of 8.1%, 8.8%, and 10.0% respectively [5]. - The target price corresponds to a price-to-book (PB) ratio of 0.82 times, indicating a valuation premium due to effective strategic transformation and broad business expansion potential [5].