Investment Rating - The investment rating for the company is "Outperform the Market" [5][3] Core Views - The company's revenue remained stable with a slight decrease in profit, reporting operating income of 89.4 billion yuan, a year-on-year decline of 0.1%, and a net profit attributable to shareholders of 25.2 billion yuan, down 2.6% year-on-year [1][3] - Non-interest income showed strong growth, with net fee income increasing by 8.8% to 10.3 billion yuan, driven by the expansion of corporate and funding businesses [2][3] - The cost-to-income ratio improved, with business and management expenses decreasing by 4.6% to 50.6 billion yuan, contributing positively to net profit [2][3] Financial Performance Summary - For Q1 2025, the company achieved total assets of 17.7 trillion yuan, a year-on-year growth of 8.3%, with deposits increasing by 9.2% to 16.0 trillion yuan and loans growing by 9.8% to 9.4 trillion yuan [1][2] - The weighted ROE for Q1 2025 was 11.3%, down 1.0 percentage points year-on-year [1] - The non-performing loan ratio at the end of Q1 2025 was 0.91%, slightly up from the beginning of the year [2] Earnings Forecast and Valuation - The earnings forecast for the company has been slightly adjusted, with expected net profits for 2025-2027 at 83.6 billion, 85.1 billion, and 86.9 billion yuan respectively, reflecting year-on-year growth rates of -3.3%, 1.7%, and 2.2% [3][4] - The current stock price corresponds to a PE ratio of 6.9, 6.8, and 6.6 for the years 2025, 2026, and 2027, and a PB ratio of 0.61, 0.57, and 0.54 respectively [3][4]

Core Viewpoint - Agricultural Bank of China (ABC) has achieved positive growth in both revenue and profit in Q1, contrasting with the declining performance of other major banks, driven primarily by strong growth in non-interest income despite a challenging bond market [1][3]. Group 1: Financial Performance - In Q1, ABC's non-interest income growth reached 45.3%, significantly higher than the full-year growth rate of 26.3% in 2024, showcasing its resilience in a tough market [1][2]. - The bank's investment net income increased by 71 million, a year-on-year increase of 35 million, while fair value changes contributed an additional 39 million, indicating effective timing in investment strategies [3][4]. - ABC's total assets grew at a rate of 6.3%, the lowest among the six major state-owned banks, reflecting a strategic decision to control asset growth and structure [5][6]. Group 2: Asset Management Strategy - The bank has actively reduced interbank assets and adjusted financial investment growth from 23.5% at the end of 2024 to 12.7% in Q1 2025, while maintaining a loan growth rate of around 10% [5][6]. - ABC's significant increase in precious metal investments aligns with market trends, demonstrating a proactive approach to asset allocation [6]. Group 3: Areas for Improvement - Despite strong performance in asset management, ABC's deposit growth of 3.1% and net fee income decline of 3.5% indicate areas needing enhancement [7]. - Long-term sustainability of excess returns relies on improving deposit levels and intermediary income, as well as maintaining high asset quality, which is currently leading among large banks [7].