PAB(SZ:000001) ZHONGTAI SECURITIES·2024-03-14 16:00Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's 2023 revenue decreased by 8.5% year-on-year, while net profit increased by 2.1%. The decline in revenue was primarily due to both interest and non-interest income pressures [4][8] - The company is expected to see a gradual improvement in asset quality and profitability in the coming years, supported by its strong backing from the group and its focus on optimizing customer segments and risk preferences [5] Summary by Sections Financial Performance - Total revenue for 2023 was 164,699 million, down from 179,895 million in 2022, reflecting a year-on-year decline of 8.5% [4] - Net profit for 2023 was 46,455 million, a slight increase of 2.1% compared to 45,516 million in 2022 [4] - The net interest income decreased by 9.3% year-on-year, influenced by a decline in interest margins and slower credit growth [8] - Non-interest income also fell by 6.1%, impacted by market volatility affecting fees and investment income [8] Asset and Liability Management - Total assets grew by 5% year-on-year, while total loans increased by 2.4%, indicating a slower growth rate for loans compared to total assets [17] - The structure of assets showed that loans accounted for 67.9% of interest-earning assets, with bond investments at 20.3% [17] - On the liability side, total liabilities increased by 4.7%, with total deposits growing by 3.2%, indicating a slower growth in deposits compared to liabilities [17] Profitability and Valuation - The company’s projected price-to-book (P/B) ratios for 2024, 2025, and 2026 are 0.46, 0.42, and 0.38 respectively, suggesting a potential undervaluation [5] - The net asset return rate for 2023 was 12.11%, with expectations of a gradual decline to 9.99% by 2026 [4] Dividend Policy - The dividend payout ratio has significantly increased from approximately 12% to 30%, indicating a commitment to returning value to shareholders [4]