Core Viewpoint - The recent significant rise in the banking sector does not provide a straightforward investment conclusion, as the market is complex and influenced by various factors [2]. Short-term Gains Not a Decision Basis - Short-term price increases can affect public opinion but should not be the basis for investment decisions. Historical examples show that prices can continue to rise or fall dramatically after a short-term surge [4]. Need for Improvement in Interest Margins - Despite low bad debt rates and high capital adequacy ratios, the banking sector faces risks from low interest margins, which are at historically low levels. Improvement in these margins is tied to the overall economic recovery [6][7]. Valuation Considerations - The lowest valuations for the banking sector have passed, with current valuations still not high. The relative attractiveness of bank stocks is decreasing as prices rise, especially considering high leverage and potential bad debt risks [9]. Differences Among Banks - There are significant differences in operational performance and valuation among banks. Investors should consider various factors such as bad debt generation, net interest margin changes, asset composition, capital adequacy, and management quality when evaluating banks [11].

Group 1 - Government financing continues to support social financing, with M1 growth improving. As of the end of May, the social financing scale increased by 8.7% year-on-year, while M2 and M1 grew by 7.9% and 2.3% respectively [5][6][7] - The new corporate medium and long-term loans decreased by 1,700 million yuan year-on-year, reflecting the substitution effect of government debt and corporate bonds [6][7] - The government issued 14,633 million yuan in new government bonds in May, which is an increase of 2,367 million yuan compared to the same period last year, supporting a rapid growth in social financing [7][8] Group 2 - Global asset review indicates that the stock market mostly declined, while crude oil prices rebounded significantly due to geopolitical tensions in the Middle East [12][13] - Brent crude oil prices surged over 7% on June 13, with concerns about supply disruptions from Iran potentially affecting global oil production [14] - The domestic equity market saw a decline, with the Shanghai Composite Index falling by 0.75% to 3,377 points, and the Shenzhen Component Index and ChiNext also experiencing losses [19][20] Group 3 - The report highlights the importance of focusing on stable dividends and recovery potential in investment strategies, particularly in state-owned banks and leading small and medium-sized banks [11] - The report suggests that the overall asset quality remains stable, despite the need for further confirmation regarding retail asset risks [11][22] - The report emphasizes the need for a balanced approach in credit issuance, focusing on both total volume and structural optimization to support consumption and innovation [7][11]

Investment Rating - The report maintains a "Buy" rating for the banking industry, indicating a projected investment return exceeding the market benchmark index by more than 15% over the next 6-12 months [1]. Core Insights - The banking sector demonstrates strong resilience in fundamentals, with stable profitability and asset quality. In Q1 2025, commercial banks achieved a net profit of 656.8 billion, with a year-on-year profit growth decline of 2.3% [4][5]. - The report highlights that the decline in profit growth is consistent with the previous year, with non-interest income contributing 25% to total revenue, an increase of 2.5 percentage points compared to 2024 [5][6]. - The report emphasizes the stability of asset quality, with a non-performing loan (NPL) ratio of 1.51%, slightly up by 1 basis point from the end of the previous year [23][24]. Summary by Sections Profitability and Revenue - In Q1 2025, the profitability of commercial banks decreased by 2.3%, with state-owned banks showing a profit growth of 0.1%, while joint-stock banks, city commercial banks, and rural commercial banks experienced declines of 4.5%, 6.7%, and 2% respectively [5][7]. - The report notes that the net interest margin (NIM) narrowed to 1.43%, down 9 basis points year-on-year, with state-owned banks having a NIM of 1.33% [15][18]. Credit and Asset Quality - The report indicates that credit issuance remains strong, with total assets of commercial banks growing at a rate of 7.2% year-on-year. New loans and non-credit assets increased by 9.1 trillion and 4.6 trillion respectively [8][9]. - The NPL ratio remains stable at 1.51%, with a provision coverage ratio above 200%, indicating a robust capacity to absorb potential losses [23][24]. Capital Adequacy - As of Q1 2025, the risk-weighted assets (RWA) of commercial banks grew by 6.4%, leading to a slight decline in capital adequacy ratios across various bank types [29][30]. - The core Tier 1 capital adequacy ratio for commercial banks stands at 10.7%, reflecting a decrease from the previous year [29]. Investment Recommendations - The report suggests focusing on banks with strong fundamentals and high dividend yields, particularly large state-owned banks, which exhibit solid investment value due to their high dividend rates [31][44]. - It also highlights the potential of mid-sized banks with convertible bonds, which have shown strong performance recently [44][46].

Industry Investment Rating - The industry investment rating is maintained at "Outperform the Market" [1] Core Viewpoints - The report highlights that the overall operating income, pre-provision profit, and net profit attributable to shareholders of listed banks for 2024 are expected to grow at rates of 0.08%, -0.72%, and 2.35% respectively. In Q1 2025, these growth rates are projected to decline to -1.72%, -2.15%, and -1.20%, indicating a downward trend in performance due to the impact of interest rate adjustments and market fluctuations [3][10][13] - The report emphasizes that the non-interest income growth of banks has slowed down due to market volatility, which has affected trading positions and overall performance [4][10] - The asset quality of listed banks is showing slight improvement, with the non-performing loan ratio decreasing from 1.24% in 2024 to 1.23% in Q1 2025, and the overall provision coverage ratio remaining stable around 239.91% in 2024 and 237.92% in Q1 2025 [4][10][13] Summary by Sections 1. Impact of Repricing and Market Fluctuations - The report notes that the combination of repricing impacts and market volatility has led to a decline in performance for Q1 2025, with significant drops in revenue and profit growth rates compared to 2024 [3][10] - The performance of city commercial banks has been notably better than other types of banks, with positive revenue growth in both 2024 and Q1 2025 [10][13] 2. Growth of Interest-Generating Assets - The growth rate of interest-generating assets for listed banks was 0.44% in 2024, with a slight increase to 0.79% in Q1 2025. However, the growth in deposits remained stable at 5.59% in 2024 and 6.22% in Q1 2025 [4][10] 3. Interest Margin Performance - The report indicates that both the yield on interest-generating assets and the cost of interest-bearing liabilities have decreased significantly in Q1 2025, affecting the interest margin performance across banks [4][10] 4. Non-Interest Income Growth - Non-interest income growth for listed banks was 6.71% in 2024, but it fell to -1.87% in Q1 2025, primarily due to the impact of market conditions on fee income and other non-interest revenues [4][10] 5. Asset Quality Improvement - The report highlights a slight improvement in asset quality, with a marginal decrease in the non-performing loan ratio and stable provision coverage ratios, indicating a cautious but positive trend in credit quality [4][10][13] 6. Investment Recommendations - The report suggests focusing on major state-owned banks such as Industrial and Commercial Bank of China, China Construction Bank, and Bank of Communications, as well as regional banks like Chongqing Bank and Chengdu Bank, which may benefit from supportive fiscal policies [5][10]

Investment Rating - The report maintains an "Overweight" rating for the company [1] Core Views - The company reported a Q1 2025 revenue of 212.77 billion yuan, a decrease of 3.22% year-on-year, and a net profit attributable to shareholders of 84.16 billion yuan, down 3.99% year-on-year [2] - Total assets at the end of Q1 stood at 51.55 trillion yuan, reflecting an increase of 8.29% year-on-year, with a non-performing loan ratio of 1.33%, down 1 basis point quarter-on-quarter [2] - The net interest margin for Q1 was 1.33%, a decline of 15 basis points year-on-year [2] Summary by Sections Financial Performance - Q1 2025 revenue decreased by 3.22% year-on-year to 2127.74 billion yuan, with net profit down 3.99% to 841.56 billion yuan [2] - Total assets increased by 8.29% year-on-year to 51.55 trillion yuan, with a non-performing loan ratio of 1.33% [2] Loan and Deposit Growth - Government financing has driven growth in investment assets, while loan growth has slightly slowed due to demand factors [6] - Deposit growth has shown a slight recovery, influenced by macroeconomic policies [6] Interest Margin and Income - The net interest margin for Q1 was 1.33%, reflecting a decline due to repricing effects [6] - Fee and commission income has seen a narrowing decline, with potential for recovery in the upcoming quarters [6] Asset Quality - The overall asset quality remains stable, with a non-performing loan ratio of 1.33% at the end of 2024 [7] - Individual loan risks are expected to be manageable, supported by a solid customer base and prudent risk management [7] Earnings Forecast and Investment Recommendation - The company is expected to maintain stable operations despite rising pressures, with projected revenues of 817.5 billion yuan, 833 billion yuan, and 880.2 billion yuan for 2025, 2026, and 2027 respectively [8] - The report maintains an "Overweight" rating based on the company's strong customer base, diversified business, and stable dividend policy [8]

Investment Rating - The investment rating for Hangzhou Bank is "Buy" and is maintained [9]. Core Views - Hangzhou Bank's Q1 2025 revenue growth is 2.2%, with a net profit growth of 17.3% and net interest income growth of 6.8%. The bank's loan and deposit growth is strong, with loans increasing by 6.2% and deposits by 6.0% compared to the beginning of the year. It is expected that the credit growth will continue to maintain double-digit growth throughout the year. The non-performing loan ratio remains stable at 0.76%, and the coverage ratio is at 530%, indicating strong asset quality [2][6]. Summary by Sections Financial Performance - In Q1 2025, Hangzhou Bank's net interest income increased by 6.8%, driven by stable net interest margins and strong balance sheet expansion. Non-interest income decreased by 5.4% year-on-year, primarily due to a high base from the previous year and fluctuations in the bond market, which led to an 18.0% decline in investment income. However, fee income grew by 22.2% [12][20]. Scale and Growth - Total assets grew by 5.2% compared to the beginning of the year, with loans increasing by 6.2%. Corporate loans grew by 9.7%, supported by strong infrastructure demand in developed regions. Retail loans saw a slight decline of 1.3%, but mortgage lending is expected to continue its recovery throughout the year. Deposits increased by 6.0%, with corporate deposits growing by 6.6% and retail deposits by 6.5% [12][20]. Interest Margin - The cost of liabilities continues to improve, alleviating downward pressure on interest margins. The net interest margin for the full year 2024 is expected to be 1.41%, with a stable trend observed since Q4. The cost of deposits is projected to decline by 15 basis points year-on-year, contributing to the expected growth in net interest income [12][20]. Asset Quality - The bank maintains excellent asset quality, with a non-performing loan ratio stable at 0.76% and a coverage ratio of 530%. The net generation rate of non-performing loans for 2024 is expected to be 0.80%, reflecting retail risk fluctuations, but remains at a good level compared to peers. The bank's low exposure to internet loans and partnerships with leading institutions suggest manageable risk levels [12][20]. Investment Recommendation - The bank's performance is expected to maintain high-quality growth, with current valuations significantly undervalued. The projected dividend per share (DPS) is expected to grow by 25% year-on-year, and the compound dividend yield over the next three years is anticipated to lead the industry. The stock price is close to the convertible bond redemption price, indicating potential upward valuation after the bond is absorbed [12][20].

Investment Rating - The report maintains a "Buy" rating for Postal Savings Bank of China (601658) [1] Core Views - The bank's revenue for Q1 2025 decreased by 0.1% year-on-year, with net profit declining by 2.6% [6] - The non-performing loan (NPL) ratio increased slightly to 0.91%, while the provision coverage ratio fell to 266% [6] - The bank's loan growth outpaced major state-owned banks, with a year-on-year increase of 9.8% in Q1 2025 [6] - The net interest margin (NIM) decreased to 1.71%, reflecting ongoing pressure on interest rates [6] - The report anticipates a modest recovery in profitability, projecting net profit growth rates of 1.45%, 4.15%, and 6.72% for 2025, 2026, and 2027 respectively [6] Financial Data and Earnings Forecast - Q1 2025 revenue was 893.6 billion yuan, with a net profit of 252.5 billion yuan [4] - The bank's total loans reached 9,356.2 billion yuan, with total deposits at 15,976.5 billion yuan [10] - The forecast for total operating income is 351,263.09 million yuan for 2025, with a projected year-on-year growth rate of 0.71% [5] - The bank's return on equity (ROE) is projected to decline to 9.49% in 2025 [5] - The price-to-book (PB) ratio is currently at 0.57, with a projected dividend yield of 5.1% for 2025 [6]

Performance Summary - Jiangsu Bank reported a revenue growth of 6.2% year-on-year for Q1 2025, compared to an annual growth of 8.7% in 2024, while net profit increased by 8.2% year-on-year, against a 10.8% annual growth in 2024 [1] - The bank maintained a high growth in operating performance, with both revenue and profit growing over 5%. The credit growth remained robust, supported by liabilities that bolstered net interest margin resilience, leading to a 21.9% year-on-year increase in net interest income for Q1 2025 [1] - Net interest income also saw a quarter-on-quarter increase of 16.3%, with an annualized net interest margin rising by 13 basis points to 1.8% [1] Asset Quality - The bank's asset quality indicators showed improvement, with a non-performing loan (NPL) ratio of 0.86%, down 3 basis points quarter-on-quarter and 5 basis points year-on-year [3] - The non-performing loan generation rate decreased to 1.03%, down 34 basis points year-on-year and 38 basis points quarter-on-quarter, while the ratio of loans under special attention fell to 1.33% [3] - The overdue loan ratio also improved, decreasing by 1 basis point to 1.11% [3] Loan Growth - In Q1 2025, the bank experienced strong growth in both corporate and retail loans, with total interest-earning assets increasing by 20.6% year-on-year [2] - Corporate loans grew by 25.9% year-on-year, while retail loans saw a 10.0% increase [2] - The bank's interest-bearing liabilities rose by 22.0% year-on-year, with deposits increasing by 16.0% [2] Fee Income - Non-interest income showed a decline of 23.0% year-on-year, primarily due to other non-interest income dragging down overall performance [2] - However, net fee income increased by 21.8% year-on-year, indicating a strong performance in fee-generating activities [2] Investment Outlook - Jiangsu Bank's core competitive advantages include its small and micro business focus, strong corporate business in manufacturing and infrastructure, and retail business scale advantages [4] - The bank's projected price-to-book ratios for 2025, 2026, and 2027 are 0.75X, 0.68X, and 0.61X respectively, with price-to-earnings ratios of 5.55X, 5.21X, and 4.94X [4] - The bank's strong net interest margin trends, quality asset performance, and capital replenishment are expected to support sustained performance [4]

Investment Rating - The investment rating for the company is "Buy" [7] Core Views - The company's asset quality continues to improve, with a TTM real non-performing loan generation rate of 1.24%, a decrease of 16 basis points from the previous quarter, maintaining the improvement trend since Q3 2024 [1][5] - Revenue and net profit for Q1 2025 decreased by 3.6% and 2.2% year-on-year, respectively, primarily due to slowed growth in scale and increased non-interest burdens, although interest margin pressures improved [2][3] - The average daily interest margin for Q1 2025 was 1.80%, down 7 basis points year-on-year, but rebounded by 2 basis points compared to Q4 2024, benefiting from a significant decrease in the interest rate paid on deposits [3] - The bank's financial investment balance reached 3.55 trillion, demonstrating resilience amid challenges in the bond market, with minimal losses reported [4] - The bank's non-performing loan ratio increased slightly to 1.08% at the end of Q1 2025, while the attention loan ratio remained stable at 1.71% [5] Summary by Sections Performance Overview - For Q1 2025, the company reported a revenue of 55,683 million, a decrease of 3.6% year-on-year, and a net profit of 23,796 million, down 2.2% year-on-year [12] - The return on equity (ROE) for Q1 2025 was 9.0%, reflecting a decline from previous quarters [12] Profitability and Valuation - The forecasted net profit growth rates for 2025-2027 are -1.16%, 0.41%, and 2.25%, respectively, with corresponding book values per share (BPS) of 39.20, 41.64, and 44.16 [6] - The target price is set at 25.82 CNY per share, indicating a potential upside of 23% from the current price [6] Asset Quality - The non-performing loan ratio at the end of Q1 2025 was 1.08%, with a slight increase from the previous quarter, while the attention loan ratio remained stable at 1.71% [5] - The provision coverage ratio decreased to 233% [1][5]

Investment Rating - The investment rating for CITIC Bank is "Buy" [5] Core Views - CITIC Bank's Q1 2025 report indicates accelerated asset expansion but a decline in net interest margin, with other non-interest income dragging down overall performance [1][2] - Revenue for Q1 2025 decreased by 3.7% year-on-year, while net profit attributable to shareholders grew by 1.7%, reflecting a slowdown compared to 2024 [2][5] - The bank's total assets increased by 8.7% year-on-year, with loans and bond investments also showing growth [2][3] Summary by Sections Performance Overview - Q1 2025 revenue was 51,770 million, down 3.7% year-on-year, while net profit was 19,509 million, up 1.7% [2][11] - The non-performing loan ratio remained stable at 1.16%, with a provision coverage ratio of 207%, down 2.3 percentage points from the end of 2024 [1][4] Revenue Growth - The decline in revenue growth was primarily due to a decrease in net interest margin and fluctuations in trading income, despite support from scale expansion and provisioning [2][3] - Total assets reached 9,855,268 million, with loans growing by 5.1% year-on-year [2][11] Net Interest Margin - The net interest margin for Q1 2025 was 1.61%, down 10 basis points from the previous quarter, with asset yield decreasing by 25 basis points to 3.31% [3][11] - The cost of liabilities decreased by 15 basis points to 1.74%, benefiting from adjustments in deposit rates [3] Asset Quality - The non-performing loan ratio was stable at 1.16%, with a slight increase in the attention loan ratio to 1.68% [4][11] - The true non-performing loan generation rate for Q1 2025 was 1.28%, up 2 basis points from the previous quarter [4] Profit Forecast and Valuation - Projected net profit growth for 2025-2027 is 0.6%, 3.0%, and 4.9%, respectively, with a target price of 9.31 per share, indicating a potential upside of 29% [5][12]