2024-04-08 16:00Investment Rating - The report initiates coverage with a "Buy" rating for Agricultural Bank of China (601288) [4] Core Views - The report highlights that Agricultural Bank has benefited from the "中特估" policy and has seen a valuation recovery, with a stock price increase of 59% from January 3, 2023, to April 8, 2024, outperforming other state-owned banks and the Shenwan Bank Index by 26 percentage points and 57 percentage points respectively [4] - The bank's price-to-book ratio (PB) has improved from 0.46 at the beginning of 2023 to 0.63, supported by high dividends and low valuations [4] - The report anticipates that Agricultural Bank will continue to perform well in the new economic cycle, with expected net profit growth rates of 2.5%, 3.1%, and 4.9% for 2024-2026 [9] Summary by Sections Market Data - Closing price as of April 8, 2024, is 4.34 yuan - The one-year high and low prices are 4.4 yuan and 3.16 yuan respectively - The market capitalization of circulating A-shares is 1,385,520 million yuan [1] Financial Performance - The report projects net interest income for 2024E at 582,929 million yuan, with a year-on-year growth of 2.0% - Non-interest income is expected to be 116,924 million yuan for 2024E, reflecting a decrease of 5.0% year-on-year - The net profit for 2024E is projected at 276,483 million yuan, with a year-on-year growth of 2.5% [24] Valuation Metrics - The current stock price corresponds to a 0.59 times price-to-book ratio for 2024, with a dividend yield of 5.3% [9] - The report indicates that Agricultural Bank's return on equity (ROE) for 2023 is 10.92% and is expected to decline to 10.40% in 2024E [24] Risk Management - The report notes that Agricultural Bank maintains a strong provision coverage ratio of 303.9% for 2023, indicating robust risk management practices [24]