Huachuang Securities·2024-04-28 17:01Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 7.88 CNY [2][3]. Core Insights - The company's Q1 2024 revenue slightly decreased by 0.03% year-on-year to 67.059 billion CNY, while net profit attributable to shareholders increased by 1.44% year-on-year to 24.988 billion CNY [2][3]. - The non-performing loan (NPL) ratio decreased by 1 basis point to 1.32%, and the provision coverage ratio increased by 1.8 percentage points to 197.05% [2][3]. - The decline in revenue was primarily due to weak non-interest income, while net interest income performed better than expected, contributing 62% to total revenue [3]. - The annualized net interest margin for Q1 2024 was estimated at 1.26%, up 3 basis points from Q4 2023, driven by a decrease in funding costs [3]. - The bank's asset quality remained stable, with a slight increase in the attention rate and overdue rate, indicating some pressure on retail loan repayment capabilities [3]. Financial Performance Summary - Q1 2024 total revenue was 670.59 billion CNY, with a year-on-year growth rate of -0.03% [9]. - Net profit attributable to shareholders for 2024E is projected at 93.917 billion CNY, reflecting a growth rate of 1.3% [9]. - The bank's total assets are expected to grow from 14.06 trillion CNY in 2023 to 17.81 trillion CNY by 2026 [10]. - The core Tier 1 capital adequacy ratio improved to 10.44% in Q1 2024, indicating a strengthening capital position [3][10]. Loan and Deposit Growth - In Q1 2024, the bank added 246.1 billion CNY in loans, with a healthy structure in new loans across corporate and retail segments [3]. - The total loan balance is projected to grow from 7.96 trillion CNY in 2023 to 10.30 trillion CNY by 2026 [10]. Market Position and Strategy - The bank is strategically positioned in the economically developed Yangtze River Delta region and has been focusing on retail and wealth management businesses [3]. - The collaboration with HSBC aims to enhance international business and increase overseas revenue contributions [3].