Haitong Securities·2024-03-31 16:00Investment Rating - The investment rating for the company is "Outperform the Market" [2] Core Views - The company's revenue for 2023 increased by 6.41% year-on-year, while net profit attributable to shareholders grew by 2.38%, showing a steady quarterly improvement. The company faces relatively small pressure on interest margins, and non-interest income has shown positive growth. The dividend payout ratio remains stable at 30%, leading to the maintenance of the "Outperform the Market" rating [18][37]. Financial Performance - The asset yield for the year remained stable at around 3.5%, an increase compared to 2022. Despite rising costs on the liability side, the company capitalized on the Federal Reserve's interest rate hikes, improving foreign currency spreads [4]. - Both asset and loan growth rates improved quarter-on-quarter. In personal loans, non-housing consumer loan balances grew by nearly 45%, contributing significantly to personal loan growth. The increase in corporate loans was mainly seen in infrastructure and manufacturing sectors [5]. - The company reported a cost-to-income ratio of 28.50%, a decrease of 0.42 percentage points year-on-year, indicating improved operational efficiency [37]. Income and Profitability - The company’s net interest income and non-interest income growth rates have shown positive trends, with net interest income growth at 1.52% and non-interest income growth at 0.51% for 2023 [9][26]. - The forecast for earnings per share (EPS) for 2024-2026 is projected at 0.75, 0.79, and 0.82 yuan, with net profit growth rates of 1.12%, 3.84%, and 4.15% respectively [19]. Valuation - Based on the Dividend Discount Model (DDM), the fair value is estimated at 5.43 yuan, while the Price-to-Book (PB) ratio for 2024E is projected at 0.54 times, leading to a fair value range of 5.26 to 5.43 yuan. This corresponds to a 2024 PE ratio of 6.97 to 7.19 times, compared to a peer average PE of 5.19 times [19][21].