Huachuang Securities·2025-10-31 12:43Investment Rating - The report maintains a "Recommendation" rating for CITIC Bank, with a target price of 10.57 CNY / 10.02 HKD [2][8]. Core Insights - CITIC Bank's Q3 2025 results show a balanced development in volume, price, and quality, with improvements in credit structure. The bank's net profit attributable to shareholders increased by 3.02% year-on-year [2][8]. - The bank's non-performing loan (NPL) ratio remained stable at 1.16%, while the provision coverage ratio decreased by 3.4 percentage points to 204.2% [2][8]. - The report highlights a decline in other non-interest income, which negatively impacted revenue growth, but core revenue capabilities improved due to a stable net interest margin [8]. Financial Performance Summary - For the first three quarters of 2025, CITIC Bank achieved operating income of 156.6 billion CNY, a decrease of 3.46% year-on-year. Operating profit was 65.42 billion CNY, up 4.70% year-on-year, and net profit attributable to shareholders was 53.391 billion CNY, up 3.02% year-on-year [2][8]. - The bank's total assets were reported at 9.532 trillion CNY, with a loan balance of 5.720 trillion CNY, reflecting a year-on-year growth of 6.4% in interest-earning assets [8][10]. - The report projects a modest growth in net profit for 2025-2027, with expected growth rates of 2.4%, 3.0%, and 4.1% respectively [8][9]. Asset Quality and Credit Structure - The report indicates that while the overall asset quality remains stable, the NPL generation rate increased slightly to 1.22%. However, there are signs of improvement in the quality of mortgage loans, with the mortgage NPL ratio decreasing to 0.45% [8][12]. - Retail loans showed better growth compared to corporate loans, with retail loan balances increasing by 75.1 billion CNY in Q3 2025 [8][12]. Valuation and Market Position - The report adjusts the target price based on historical average price-to-book (PB) ratios, raising the 2026E target PB to 0.75X, which corresponds to the target price of 10.57 CNY [8][9]. - CITIC Bank's competitive position among national joint-stock banks is viewed positively, supported by the comprehensive financial capabilities of CITIC Group [8][9].