INDUSTRIAL BANK(SH:601166) Minsheng Securities·2024-04-26 06:30Investment Rating - The report maintains a "Recommended" rating for the company [3]. Core Views - The company's revenue for Q1 2024 increased by 4.2% year-on-year, marking a turnaround from negative growth, with net profit showing a smaller decline of 3.1% [2][3]. - The net interest income grew by 5.1% year-on-year, and non-interest income saw a significant increase of 16.2%, despite a decline in commission income [2]. - The asset quality remains stable with a non-performing loan ratio of 1.07% and a provision coverage ratio of 246%, indicating a strong risk mitigation capacity [2]. Summary by Sections Financial Performance - In Q1 2024, the company achieved a revenue of 578 billion yuan, with a year-on-year growth of 4.2%, a significant improvement of 9.4 percentage points compared to the previous year [2]. - The net profit attributable to shareholders was 243 billion yuan, reflecting a year-on-year decrease of 3.1%, but the decline is narrowing compared to the end of 2023 [2]. - The company’s net interest margin stood at 1.87%, showing resilience despite pricing pressures [2]. Asset and Liability Management - Total assets and total loans increased by 4.4% and 7.9% year-on-year, respectively, with loans making up 54.1% of total assets [2]. - The company effectively managed costs, with the interest rate on deposits decreasing to 2.12% and the proportion of demand deposits rising to 37.8% [2]. Risk Management - The non-performing loan ratio remained stable at 1.07%, while the attention ratio increased to 1.70% due to proactive adjustments in risk classification [2]. - The company has maintained a high level of credit impairment provisions, with a year-on-year increase of 46% in credit impairment losses, ensuring adequate risk coverage [2]. Earnings Forecast - The expected earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 3.75, 3.92, and 4.12 yuan, respectively [3]. - The report indicates a price-to-book (PB) ratio of 0.4 for 2024, based on the closing price on April 25, 2024 [3].