PAB(SZ:000001) Guotou Securities·2025-08-24 08:33Investment Rating - The investment rating for Ping An Bank is "Buy-A" with a 6-month target price of 14.17 CNY, compared to the current stock price of 12.06 CNY [5][12]. Core Insights - The report highlights that Ping An Bank's performance in the first half of 2025 shows a marginal recovery, driven by reduced provisioning pressure and growth in non-interest income, despite a decline in overall revenue and net interest margin [2][10]. - The bank's asset expansion remains sluggish, with a year-on-year decrease of 1.61% in interest-earning assets, indicating challenges in maintaining growth momentum [2][10]. - The report notes a shift in credit structure, with corporate loans showing growth while retail loans, particularly credit cards and consumer loans, continue to decline [3][10]. - The net interest margin has narrowed to 1.76% in Q2 2025, reflecting a decrease in asset yields and a slight reduction in funding costs [4][8]. - Non-interest income has shown signs of recovery, with a year-on-year decline of only 3.3% in Q2 2025, driven by a rebound in fee income from wealth management services [8][10]. Summary by Sections Financial Performance - Revenue for 2025 is projected to decline by 7.79%, while net profit is expected to grow by 0.82% [12]. - The bank's net profit for the first half of 2025 increased by 3.9% year-on-year, supported by lower provisioning and improved non-interest income [2][10]. Asset Quality - The non-performing loan (NPL) generation rate has decreased to 1.64% in the first half of 2025, indicating a gradual easing of credit risk [9][10]. - The NPL ratio for retail loans has improved, while the corporate loan NPL ratio has slightly increased due to exposure in the real estate sector [9][10]. Retail Banking - Retail customer growth remains stagnant, with a slight increase in the number of retail clients but overall asset under management (AUM) growth showing signs of slowing down [10][36]. - The bank's wealth management fees have rebounded, with a 13.1% year-on-year increase in Q2 2025, reflecting a positive trend in non-interest income [8][10]. Market Position - Ping An Bank's market capitalization stands at approximately 234 billion CNY, with a circulating market value nearly equal [5]. - The bank's valuation metrics indicate a price-to-book ratio of 0.60X, suggesting it is trading at a low valuation relative to its book value [12].