被长期低估的红利稳定型大行

Investment Rating - The investment rating for the company is "Buy" [4] Core Insights - The report highlights that the company has been a benchmark in the banking sector over the past three years, with a cumulative increase of 75% from 2021 to Q1 2024, reflecting a significant valuation change in the sector. Although the return on equity (ROE) for state-owned banks is still declining, the long-standing undervaluation is beginning to recover comprehensively. If ROE confirms a bottom in line with the economic cycle, the valuation rebound could be even more pronounced [2][5][11] - The company has shown significant improvement in asset quality over the past three years, with a non-performing loan (NPL) ratio decreasing by 35 basis points to 1.33% by the end of 2023, aligning with the average of the four major state-owned banks. The report emphasizes that the company's asset quality is expected to continue improving, supporting stable profitability [5][20][31] Summary by Sections Banking Sector Changes - The company has led the banking sector with a 75% increase since 2021, indicating a recovery from previous undervaluation. The report suggests that the current market dynamics are shifting towards high-dividend assets, with the company's dividend yield exceeding government bond yields by 344 basis points as of April 8, 2024 [5][15] Asset Quality Improvement - The company has successfully completed a three-year asset quality improvement initiative, resulting in a significant reduction in the NPL ratio and an increase in the provision coverage ratio to 195% by the end of 2023. The report notes that the company benefits from its strong presence in the economically developed Yangtze River Delta region, which contributes to its stable asset quality [17][20][31] Loan Portfolio and Risk Management - The report indicates that the company's corporate loan NPL ratio is lower than that of its peers, attributed to its focus on economically developed regions. The real estate sector accounts for 6.1% of the company's corporate loans, with an NPL ratio of 4.99%, which is still below the average of the four major banks. The report anticipates that the risks associated with real estate will be manageable due to the quality of projects in developed areas [32][34]