Changjiang Securities·2025-11-16 23:30Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The state-owned banks are undergoing a systematic valuation repair process, with the company currently having the lowest PB valuation among state-owned banks in A-shares, at 0.59x, which is a 26% discount compared to the average of the other five major state-owned banks [11][17] - The expected dividend yield for 2025 is the highest among state-owned banks at 4.3%, indicating significant valuation repair potential and elasticity [11][17] - Recent improvements in the company's fundamentals have not been fully priced in, with net interest margins stabilizing and asset quality indicators showing continuous improvement [11][17] Summary by Sections Valuation and Dividend Yield - The company is trading at a PB valuation of 0.59x, which is 26% lower than the average of other major state-owned banks and 17% lower than three other banks that have completed fiscal injections this year [11][17] - The expected ROE for 2025 is 8% lower than the average of three other state-owned banks, suggesting that the current valuation discount is unreasonable [11][17] - The A/H share price difference is the lowest among major banks, with H shares trading at a 12% discount, significantly lower than the average of 24% for other state-owned banks [11][17] Fundamental Improvements - Since the asset quality improvement campaign began at the end of 2019, risk indicators have shown continuous improvement, with the non-performing loan ratio decreasing by 5 basis points to 1.26% as of Q3 2025, marking a cumulative decline of 42 basis points from the peak in 2020 [11][17] - The company's provision coverage ratio reached a ten-year high of 210% as of Q3 2025, indicating enhanced risk absorption capacity [11][17] - The net interest margin has shown the best performance among state-owned banks since 2024, supporting positive growth in net interest income [11][17] Market Performance and Future Outlook - The company's stock price has declined by 9% since July 10, 2025, the largest drop among state-owned banks, primarily due to trading factors [11][17] - The current stock price is 12% lower than the price at which fiscal injections were made this year, the highest discount among four state-owned banks [11][17] - The recent acceleration of mid-term dividends among state-owned banks is expected to attract dividend-focused investors, with the company's A-share index weight at 0.78%, ranking fifth among bank stocks [11][17]