Dongguan Securities·2024-05-07 03:30Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock performance that will exceed the market index by more than 15% in the next six months [2][10][20]. Core Insights - The company's net interest income has decreased year-on-year by 6.15%, primarily due to a decline in net interest margin, while non-interest income has shown strong performance with a 40.06% increase in other net income [4][8]. - The loan yield decline has significantly narrowed, and deposit costs have improved quarter-on-quarter, with a net interest margin of 2.02% and a net interest spread of 1.90% for Q1 2024 [5][6]. - The non-performing loan (NPL) ratio has improved to 0.92%, down 0.03 percentage points from the end of the previous year, indicating stable asset quality [6][8]. Summary by Sections Financial Performance - In Q1 2024, the company reported operating income of 864.17 billion yuan, a year-on-year decrease of 4.65%, and a net profit attributable to shareholders of 380.77 billion yuan, down 1.96% [8][9]. - The annualized return on average total assets (ROAA) and return on average equity (ROAE) were 1.35% and 16.08%, respectively, both showing a decline compared to the previous year [9]. Revenue Structure - The revenue structure shows a decline in net interest income and fee-based income, with the latter down 19.44% year-on-year, particularly affected by a 32.59% drop in wealth management fees [4][8]. - Other non-interest income has increased significantly, driven by higher returns from bond and fund investments [4]. Asset Quality - The company’s NPL generation rate is 1.03%, down 0.06 percentage points year-on-year, with the real estate sector's NPL ratio at 4.82%, also showing improvement [6][8]. - High credit-rated clients account for over 70% of the loan balance, with more than 85% of real estate development loans concentrated in first and second-tier cities [6].