Guotou Securities·2024-05-08 05:30Investment Rating - The investment rating for Postal Savings Bank is maintained at "Buy - A" with a target price of 5.98 CNY, reflecting a potential upside from the current price of 4.86 CNY as of May 7, 2024 [4]. Core Views - The report highlights that the bank's performance in Q1 2024 shows a year-on-year revenue growth of 1.44%, with net profit growth of 1.35%. The growth is attributed to the expansion of interest-earning assets, reduced provisioning pressure, and lower taxes, despite challenges from narrowing interest margins and rising costs [1][9]. - The bank's credit scale is steadily increasing, with retail loans showing significant growth. The total asset size increased by 11.12% year-on-year, with net new loans contributing significantly to this growth [1][2]. Summary by Sections Financial Performance - In Q1 2024, the bank's net interest margin was 1.92%, showing a slight improvement due to lower funding costs. The yield on interest-earning assets was 3.42%, while the cost of interest-bearing liabilities was 1.52% [3][7]. - The bank's non-interest income decreased by 4.84% year-on-year, primarily due to a decline in commission income from insurance agency services, although investment income showed a 16.74% increase [7]. Asset Quality - The non-performing loan (NPL) ratio remained stable at 0.84%, with a provision coverage ratio of 326.87%, indicating a strong capacity to absorb potential losses [8][9]. Loan and Deposit Growth - The bank's total loan balance increased by 10.18% year-on-year, with retail loans contributing significantly to this growth. The balance of inclusive small and micro-enterprise loans reached 1.58 trillion CNY, accounting for over 18% of total loans [1][2]. - Total deposits grew by 10.48% year-on-year, with retail deposits increasing by 11.67%, reflecting a strong deposit base [2]. Future Outlook - The report projects a revenue growth of -0.31% and a net profit growth of 0.29% for 2024, indicating a challenging environment ahead, particularly with high cost-to-income ratios and pressure on interest margins [9].