Ping An Securities·2024-04-30 05:30Investment Rating - The investment rating for the company is "Avoid" with an expectation that the stock price will underperform the market by more than 10% within the next six months [14]. Core Views - The company's revenue is under pressure, leading to a decline in profitability, with a year-on-year decrease of 2.8% in net profit attributable to shareholders for Q1 2024, compared to a 1% growth rate for the entire year of 2023 [5]. - The bank's net interest income and fee income have decreased by 4.2% and 2.8% year-on-year, respectively, due to the overall decline in loan rates and ongoing fee reduction policies [5]. - The bank's cost control remains strong, with business management expenses increasing only by 0.6% year-on-year, while impairment provisions have decreased by 7.6% year-on-year, alleviating some pressure on profitability [5]. - The non-performing loan (NPL) ratio remains stable at 1.36%, with a slight year-on-year decrease of 2 basis points [6]. - The bank's capital adequacy ratio has improved, with the core Tier 1 capital adequacy ratio rising by 6 basis points to 13.78% [8]. - The bank's dividend policy for the first half of 2024 will be based on the financial report, with a proposed cash dividend not exceeding 30% of the after-tax profit attributable to shareholders [8]. Summary by Sections Financial Performance - For Q1 2024, the bank reported operating income of 219.8 billion yuan, a year-on-year decline of 3.4% [18]. - The net profit attributable to shareholders for Q1 2024 was 87.7 billion yuan, down 2.8% year-on-year [18]. - The total assets reached 47.6 trillion yuan, reflecting a growth of 6.49% compared to the beginning of the year [18]. Asset Quality - The NPL ratio is stable at 1.36%, with the provision coverage ratio increasing to 216% [6][8]. - The bank's total loans increased by 4.92% year-on-year, while total deposits grew by 4.52% [20]. Capital Adequacy - The core Tier 1 capital adequacy ratio improved to 13.78%, benefiting from the implementation of capital management measures [8]. - The bank's capital structure remains robust, with a focus on maintaining a strong dividend payout ratio [8]. Future Outlook - The bank is expected to maintain stable earnings growth, with projected EPS for 2024-2026 at 1.03, 1.07, and 1.12 yuan, respectively [23]. - The bank's price-to-book ratio is projected to be 0.52x, 0.49x, and 0.46x for the years 2024-2026 [23].