PAB(SZ:000001) Huachuang Securities·2025-08-24 09:44Investment Rating - The report maintains a "Recommended" rating for Ping An Bank with a target price of 15.41 CNY, corresponding to a price-to-book (PB) ratio of 0.65x for 2025 [2][9]. Core Insights - Ping An Bank's non-interest income has shown signs of recovery, and retail loans continue to improve. The bank reported a revenue of 69.385 billion CNY for the first half of 2025, with a year-on-year decline narrowing to -10.04%. The net profit attributable to shareholders was 24.870 billion CNY, down 3.9% year-on-year. The non-performing loan (NPL) ratio decreased by 1 basis point to 1.05%, while the provision coverage ratio increased by 2 percentage points to 238.5% [2][9]. Financial Performance Summary - Revenue and Profit Trends: The revenue decline has slowed, with a 6 percentage point improvement in the second quarter of 2025 compared to the first quarter. The net interest income growth rate remained stable, while net fee income increased by 5.7% year-on-year [8][9]. - Asset Quality: The asset quality remains stable, with the NPL ratio decreasing to 1.05% and the NPL generation rate down to 1.64% year-to-date. The bank has increased its provision coverage, indicating a proactive approach to managing credit risk [8][9]. - Loan Growth: Retail loan issuance has improved, with a reduction in the decline rate to -5.2%. The growth in mortgage loans was a significant contributor, with a year-on-year increase of 12.9% [8][9]. - Wealth Management: The wealth management segment has shown improvement, with fee income from wealth management rising by 12.8% year-on-year, driven by a recovery in the capital markets [8][9]. Financial Projections - The report projects a decline in net profit for 2025E at -2.6%, followed by a recovery with growth rates of 1.7% and 5.3% in 2026E and 2027E, respectively. The estimated net profit for 2025E is 43.365 billion CNY [10][11].