2024-04-30 14:02Investment Rating - The report maintains a "Buy" rating for the company, with a target price corresponding to a 2024 price-to-book (PB) ratio of 0.86 and a dividend yield of 5.7% [8]. Core Views - The company's performance in Q1 2024 was slightly below expectations, with a year-on-year revenue decline of 4.7% and a net profit decrease of 2.0%. The main factors contributing to this were a narrowing interest margin and a decline in fee income [4][8]. - Despite the challenges, there are positive signs such as a slowdown in the decline of interest margins and stable credit growth, particularly in corporate loans. The company is expected to maintain strong asset quality while expanding its balance sheet [8]. Summary by Sections Financial Performance - Q1 2024 revenue was CNY 86.42 billion, down 4.7% year-on-year, while net profit was CNY 38.08 billion, a decrease of 2.0% [6]. - Interest income fell by 6.2% year-on-year, primarily due to a 27 basis points reduction in interest margin, which negatively impacted revenue growth by 7.4 percentage points [4]. - Non-interest income also contributed negatively, declining by 2.3% year-on-year, with wealth management services seeing a significant drop of 19.4% [4]. Loan and Deposit Growth - The company added nearly CNY 307 billion in loans in Q1 2024, a year-on-year increase of CNY 224 billion, representing 67% of the total credit issued in 2023 [5]. - Corporate loans (excluding bills) accounted for CNY 192 billion of the new loans, with infrastructure and manufacturing loans making up approximately 39% of the total [5]. Profitability and Valuation - The report projects a net profit growth rate of 3.2%, 5.0%, and 8.3% for 2024, 2025, and 2026, respectively [8]. - The company's return on equity (ROE) for Q1 2024 was 4.0%, with a projected PE ratio of 6.0 for 2024 [6].