GF SECURITIES·2024-04-30 08:02Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company [4]. Core Views - The company demonstrated steady growth in credit scale, with interest-earning assets increasing by 10.9% year-on-year in Q1 2024, and loans growing by 12.4%, although slightly down from 2023 [2][3]. - The non-performing loan (NPL) ratio improved to 1.24% at the end of Q1 2024, down 3 basis points from the end of 2023, indicating stable asset quality [2]. - The capital adequacy ratio rose to 18.52%, an increase of 0.78 percentage points from the end of 2023, reflecting positive contributions from new capital regulations [2][3]. Summary by Relevant Sections Financial Performance - Q1 2024 revenue, pre-provision operating profit (PPOP), and net profit attributable to shareholders decreased by 3.0%, 4.9%, and 2.9% year-on-year, respectively, with significant declines compared to 2023 [14]. - The net interest margin narrowed to 1.44%, down 15 basis points from 2023, influenced by factors such as repricing and declining new issuance rates [15]. Profitability Forecast - The forecasted growth rates for net profit attributable to shareholders for 2024 and 2025 are 0.59% and 1.29%, respectively, with earnings per share (EPS) projected at 0.75 and 0.76 yuan per share [3]. - The current stock price corresponds to a price-to-earnings (PE) ratio of 6.1X for 2024 and 6.0X for 2025, and a price-to-book (PB) ratio of 0.56X for 2024 and 0.52X for 2025 [3]. Asset Quality - The NPL generation rate for Q1 2024 was estimated at 0.86%, an increase of 53 basis points year-on-year, suggesting potential future risk exposure [2]. - The provision coverage ratio stood at 199.94%, down 5.35 percentage points from the end of 2023, indicating a need for monitoring [2]. Capital Position - The risk-weighted assets (RWA) grew by 0.09% year-on-year, reflecting the impact of new capital regulations on the company's capital structure [2]. - The company continues to reduce interbank assets while increasing corporate loans, contributing to a more stable funding base [2].