PAB(SZ:000001) Huachuang Securities·2025-10-26 12:43Investment Rating - The report maintains a "Recommended" rating for Ping An Bank with a target price of 16.61 CNY [2][7]. Core Insights - The bank's net interest margin has rebounded against the trend, and core revenue performance is strong. For the first three quarters of 2025, the bank reported a revenue of 1,006.68 billion CNY, a year-on-year decline of 9.8%, while net profit attributable to shareholders was 383.39 billion CNY, down 3.5% year-on-year [2][7]. - The bank's asset quality remains stable, with a non-performing loan (NPL) ratio of 1.05%, unchanged from the end of the second quarter, and a provision coverage ratio of 229.60%, down 8.9 percentage points from the previous quarter [2][7]. Summary by Sections Financial Performance - Revenue decline has narrowed: The revenue for the first three quarters decreased by 9.8%, compared to a 10.0% decline in the first half. The third quarter saw a 9.2% year-on-year decline, with a 7% decrease compared to the second quarter, primarily due to other non-interest income [6][7]. - Core income pressure is easing: Net interest income fell by 8.3% year-on-year, with a 1.5% increase in Q3 compared to the previous quarter, driven by a rise in interest margin. Non-interest income saw a significant drop of 24.1% year-on-year due to high base effects from the previous year [6][7]. Loan and Asset Quality - Steady growth in corporate loans: Total loans increased by 1.3% year-on-year, with corporate loans growing by 5.1%. New loans issued in the first three quarters amounted to 3,552 billion CNY, up 11.8% year-on-year [6][7]. - Retail loans show improvement: Personal loan balances decreased by 2.1%, but the decline is narrowing, with a 0.2% increase from the previous quarter. Housing mortgage loans increased by 8.1% year-on-year [6][7]. Profitability and Cost Management - Net interest margin recovery: The net interest margin for Q3 was 1.79%, rebounding by 3 basis points from the previous quarter. The cost of interest-bearing liabilities decreased by 13 basis points to 1.61% [6][7]. - Wealth management and insurance business growth: Wealth management fee income grew by 16.1% year-on-year, driven by a 48.7% increase in personal insurance income [6][7]. Future Outlook - The bank is expected to achieve stable and sustainable growth, with projected net profit growth rates of -2.6%, 1.7%, and 5.3% for 2025E-2027E. The current valuation corresponds to a price-to-book (PB) ratio of 0.491x, with a target PB of 0.65x for 2026, leading to a target price of 16.61 CNY [7][8].