Changjiang Securities·2024-05-13 09:02Investment Rating - The investment rating for the company is "Buy" and is maintained [10]. Core Views - The report highlights that the decline in net interest margin has narrowed, which is a positive aspect amidst the overall pressure on profits due to a decrease in revenue [11][32]. - The first quarter saw a revenue decline of 4.7% year-on-year, with net profit attributable to shareholders decreasing by 2.0% [10][11]. - The report indicates that the current macroeconomic environment is exerting pressure on operations, but the narrowing of the net interest margin is seen as a bright spot, suggesting that short-term pressures do not affect the long-term investment logic [11]. Summary by Sections Financial Performance - In Q1 2024, the company's revenue decreased by 4.7% year-on-year, and net interest income fell by 6.2%, reflecting the impact of declining net interest margin and slower growth in interest-earning assets [10][11]. - Non-interest income also declined by 2.3%, with a significant drop of 19.4% in commission income, which had a notable drag on overall revenue [10][11]. - The loan growth for Q1 was 4.7%, with corporate loans increasing by 7.4% and retail loans by 1.8%, while bill financing surged by 11.2% [10][11]. Asset Quality - The non-performing loan (NPL) ratio at the end of Q1 was 0.92%, a decrease of 3 basis points from the previous quarter, indicating a slight improvement in asset quality [10][35]. - The new NPL generation rate for the bank was 1.03%, remaining stable compared to the full year of 2023 [35]. - The provision coverage ratio stood at 437%, down by 0.9 percentage points, reflecting a continuous decline over nine quarters [35]. Capital Adequacy - The core Tier 1 capital adequacy ratio at the end of Q1 was 14.1%, an increase of 0.3 percentage points, indicating a strong capital position [6][11]. - The report suggests that the bank has the capacity to maintain stable dividends due to its capital adequacy and low capital consumption business model [11].