Core Viewpoint - The company, Guoxin Securities, is utilizing risk reserves, statutory surplus reserves, and capital reserves to offset a cumulative loss of 6.121 billion yuan, effectively resetting its retained earnings to zero, which is seen as a move to shed the historical burdens from its predecessor, Huarong Securities [1][3][4]. Financial Summary - As of the end of 2024, Guoxin Securities reported a cumulative retained earnings deficit of -6.121 billion yuan, with general risk reserves, trading risk reserves, and surplus reserves each at 707 million yuan, and capital reserves at 9.628 billion yuan [2]. - The company plans to use 707 million yuan from each of the general risk reserves, trading risk reserves, and surplus reserves, along with 3.999 billion yuan from capital reserves, totaling 6.121 billion yuan to cover the losses [2]. - Post-loss compensation, the general risk reserve will be reduced to 170.78 yuan, trading risk reserve to 0 yuan, surplus reserve to 0 yuan, and capital reserve to 5.629 billion yuan, resulting in a retained earnings balance of 0 yuan [2]. Strategic Moves - The recent actions of Guoxin Securities, including the loss compensation, are part of a broader strategic reset following its rebranding and change of ownership, which includes two rounds of capital increases and significant adjustments in management and organizational structure within a year [1][5][10]. - The company has initiated two rounds of capital increases since last August, with plans to raise up to 1 billion shares in 2024 and an additional 2.4 billion shares in 2025, indicating a focus on strengthening its capital base [8][9]. - Guoxin Securities has also made significant changes in its management team, including the appointment of new executives and restructuring of key business departments, aimed at enhancing operational efficiency and adapting to market changes [9][10]. Performance Overview - Despite a gradual increase in revenue from 597 million yuan in 2022 to 1.751 billion yuan in 2024, the net profit has declined from 502 million yuan to 32 million yuan during the same period, highlighting ongoing financial challenges [4]. - The decision to clear historical losses is viewed as a necessary step for financial health and is expected to improve investor confidence and market perception, facilitating future business expansion and financing opportunities [4][10].

Group 1 - The meeting of the Financial Stability Board (FSB) in Madrid discussed global financial system vulnerabilities, non-bank financial intermediation, crypto assets, climate-related financial risks, and risk management [1] - The appointment of Andrew Bailey, Governor of the Bank of England, as the new Chair of the FSB was approved during the meeting [1] - The Deputy Governor of the People's Bank of China, Lu Lei, expressed appreciation for the outgoing Chair, Klaas Knot, for his effective leadership and contributions [1] Group 2 - Lu Lei held discussions with the Chair of the FSB's Standards Implementation Committee and the Deputy Governor of the Bank of Japan, Masayoshi Amamiya, regarding international financial regulatory standards and peer reviews [1]

Investment Rating - The report maintains a "Buy" rating for Ping An Bank [1] Core Views - The capital market has anticipated the pressure on Ping An Bank's profit for 2024, primarily due to a continuous decline in revenue and proactive provisioning, which has turned profit growth negative. The bank's revenue for 2024 decreased by 10.9% year-on-year, while net profit attributable to shareholders fell by 4.2% [6][8] - The report highlights the ongoing optimization of the retail structure and a reduction in high-risk loans, indicating that credit growth will depend on the recovery of demand from low-risk retail customers [6][11] Financial Data and Profit Forecast - Revenue and profit forecasts for Ping An Bank from 2023 to 2027 are as follows: - Total revenue (million): 2023: 164,699, 2024: 146,695, 2025E: 134,677, 2026E: 133,440, 2027E: 138,182 [5] - Net profit (million): 2023: 46,455, 2024: 44,508, 2025E: 44,109, 2026E: 44,407, 2027E: 45,677 [5] - The report projects a decline in net profit growth rates for 2025-2026, with estimates of -0.9% and 0.7% respectively [6][9] Key Financial Metrics - As of the end of 2024, the bank's non-performing loan (NPL) ratio remained stable at 1.06%, while the provision coverage ratio decreased to 251% [4][6] - The bank's net interest margin for Q4 2024 was reported at 1.7%, reflecting a quarter-on-quarter decline of 17 basis points [9][12] - The report notes a significant reduction in retail loans, with a total decrease of 334 billion yuan in 2024, including a reduction of over 210 billion yuan in retail loans [6][11] Asset Quality and Risk Management - The report emphasizes the importance of actively managing problem assets and maintaining a stable asset quality, with a focus on potential risks in real estate loans and retail loan risk mitigation [9][14] - The bank's proactive approach to asset write-offs and provisioning is highlighted as a strategic move to strengthen its financial position [9][14] Dividend Policy - The dividend payout ratio for 2024 has been reduced to 28.3%, aligning with the industry average, which corresponds to an estimated dividend yield of approximately 5.08% for 2025 [6][9]

Investment Rating - The report maintains a "Buy" rating for Ping An Bank [1] Core Views - The bank's 2024 revenue decreased by 10.9% year-on-year, with a net profit attributable to shareholders of 44.5 billion yuan, down 4.2% year-on-year. The fourth quarter of 2024 saw a significant decline in profit due to increased provisioning [4][6] - The bank's strategy focuses on optimizing its credit structure, with a notable reduction in high-risk retail loans and a cautious approach to corporate lending [6][9] - The bank's net interest margin has been under pressure due to interest rate cuts and a decrease in high-yield retail loans, leading to a 21% decline in net interest income for 2024 [6][9] Financial Data and Profit Forecast - Total revenue (in million yuan) is projected to decline from 164,699 in 2023 to 134,677 in 2025E, with a year-on-year growth rate of -8.19% [5] - Net profit attributable to shareholders is expected to decrease slightly from 46,455 in 2023 to 44,109 in 2025E, reflecting a year-on-year growth rate of -0.90% [5] - The bank's non-performing loan (NPL) ratio is expected to remain stable at around 1.06% through 2025, with a provisioning coverage ratio projected to decline to 239.90% [5][6] Key Financial Metrics - The bank's earnings per share (EPS) is forecasted to be 2.13 yuan in 2025, with a return on equity (ROE) of 9.39% [5] - The price-to-earnings (P/E) ratio is projected to be 5.63 in 2025, while the price-to-book (P/B) ratio is expected to be 0.51 [5][9] Loan and Asset Quality - The bank's total loans decreased by 33.4 billion yuan in 2024, with a significant reduction in retail loans exceeding 210 billion yuan [6][11] - The NPL ratio for corporate loans increased to 1.79% in the fourth quarter of 2024, indicating rising risks in the real estate sector [9][14] - Retail loan NPL generation is estimated to remain high at around 2.51% for 2024, despite a slight decrease in the overall retail loan NPL ratio [9][14] Dividend Policy - The bank has reduced its cash dividend payout ratio to 28.3% for 2024, which corresponds to a projected dividend yield of approximately 5.08% for 2025 [6][9]