Core Insights - The China Construction Bank's data center project in Inner Mongolia has made significant progress, transitioning from the construction phase to the operational preparation phase after successfully completing the 10KV high-voltage power supply task [1][3] - The data center, covering an area of approximately 190,600 square meters, is designed to house no fewer than 9,560 server cabinets and adheres to the A-level standards of the "Data Center Design Specification" [1] - The project aims to be a green and low-carbon demonstration project in the financial sector, with an expected Power Usage Effectiveness (PUE) value of below 1.188, providing secure and reliable computing and storage services for "Bank of China Cloud" [1] Project Development - The successful completion of the high-voltage power supply is a critical milestone that significantly advances the overall project timeline, allowing for valuable time savings in subsequent equipment debugging and system deployment [3] - The project team from China Electric Construction has demonstrated technical expertise in data center construction, ensuring a successful first-time power supply [3] - The project is expected to enhance the information technology level of the financial industry in China and provide important support for the development of the digital economy [3] Sustainability and Innovation - The project incorporates advanced energy-saving technologies and aims to serve as a beneficial reference for sustainable development in the industry [3]

Investment Rating - The report does not explicitly provide an investment rating for the financial technology sector in 2024 Core Insights - The financial technology sector in A-shares faced operational pressure in 2024, with total revenue of 1186.37 billion yuan, a year-on-year decrease of 2.73%, and a net profit of 147.62 billion yuan, down 13.85% [3][10] - Despite the overall decline, certain companies achieved double-digit revenue growth, indicating potential resilience within the sector [3][10] - The sector's R&D expenditure remained stable at 11.41% of total revenue, reflecting ongoing investment in innovation despite revenue pressures [3][12] Summary by Sections Industry Overview - The financial technology sector is experiencing a bifurcation, with significant support from policies aimed at enhancing digital finance and technological independence [4][21] - Emerging fields such as cloud computing, AI, and data utilization are expected to drive recovery in industry growth [4][30] Financial Performance - In 2024, 35 listed companies in the financial technology sector reported a total revenue of 1186.37 billion yuan, with a net profit of 147.62 billion yuan [3][10] - The banking IT segment showed a revenue decline of 3.41% year-on-year, with net profit dropping by 49.29% [3][10] R&D Investment - Total R&D investment in the financial technology sector reached 135.38 billion yuan in 2024, a decrease of 2.54% year-on-year, with a stable R&D expense ratio of 11.41% [12][13] - Companies in the securities IT and financial information services sectors exhibited significantly higher R&D expense ratios compared to the industry average [12][13] Market Dynamics - The report highlights a shift in IT investment focus towards emerging technologies, with traditional IT construction expenditures expected to decline [5][30] - The demand for IT services from small and medium-sized financial institutions is anticipated to increase, providing new growth opportunities [5][37]

Investment Rating - The report assigns an "Outperform the Market" rating to the company, marking its first coverage [5]. Core Insights - The company is expected to achieve a revenue of 760.15 billion yuan in 2024, reflecting a year-over-year decline of 2.54%, while the net profit attributable to shareholders is projected at 335.58 billion yuan, showing a slight increase of 0.88% [1][53]. - The company's total assets are anticipated to grow by 5.86% to 40.57 trillion yuan in 2024, with deposits and loans increasing by 3.73% and 8.33%, respectively [1]. - The net interest margin is projected to be 1.51% in 2024, down by 19 basis points year-over-year, but the decline is expected to slow down in the fourth quarter [2][56]. - Non-interest income is expected to grow by 5.09% in 2024, contributing significantly to overall revenue [2]. - The non-performing loan ratio is forecasted to be 1.34% at the end of 2024, indicating stable asset quality [3][58]. Financial Performance Summary - Revenue and net profit for 2024 are projected at 760.15 billion yuan and 335.58 billion yuan, respectively, with a year-over-year revenue decline of 2.54% and a net profit increase of 0.88% [1][53]. - The company’s return on equity (ROE) is expected to be 10.69%, a decrease of 0.87 percentage points from the previous year [1][54]. - The company’s total assets are expected to reach 40.57 trillion yuan, with a year-over-year growth of 5.86% [1]. - The net interest income is projected to decline by 4.43% year-over-year due to a narrowing net interest margin and insufficient effective credit demand [2][56]. - The non-performing loan ratio is expected to decrease slightly, reflecting the company's stable asset quality [3][58]. Future Earnings Forecast - The company’s net profit for 2025, 2026, and 2027 is projected to be 343.34 billion yuan, 353.37 billion yuan, and 368.82 billion yuan, respectively, with corresponding year-over-year growth rates of 2.3%, 2.9%, and 4.4% [3][62]. - The diluted earnings per share (EPS) for the same years are expected to be 1.36 yuan, 1.40 yuan, and 1.46 yuan [3][62]. Valuation and Investment Recommendation - The absolute valuation using a three-stage DDM model suggests a value range of 9.8 to 13.6 yuan per share [69]. - Relative valuation indicates a reasonable value range of 9.3 to 10.1 yuan per share, considering a premium for the company's leading position in the market [71]. - The report concludes that the company's reasonable stock price for 2025 is between 9.6 and 11.9 yuan, indicating a potential upside of approximately 7% to 33% from the current price [73].

Core Viewpoint - Construction Bank reported a stable performance in its 2024 annual results, with a slight decrease in operating income but a modest increase in net profit, indicating resilience in its financial operations [1][2][3] Financial Performance - Operating income for 2024 was 728.57 billion RMB, a year-on-year decrease of 2.29% [1] - Net profit attributable to ordinary shareholders was 328.469 billion RMB, reflecting a year-on-year increase of 0.28% [1] - Basic earnings per share stood at 1.31 RMB, with a proposed final dividend of 0.206 RMB per share [1] Asset and Liability Management - Total assets reached 40.57 trillion RMB, an increase of 5.86% year-on-year, while total liabilities were 37.23 trillion RMB [1] - The non-performing loan ratio was stable at 1.34%, with a provision coverage ratio of 233.60% [1][2] Loan and Investment Structure - Net loans and advances amounted to 25.04 trillion RMB, up 8.48%, representing an increase in the proportion of total assets by 1.49 percentage points [2] - Bond investment scale reached 10.39 trillion RMB, a growth of 10.71%, with a 1.12 percentage point increase in its share of total assets [2] Profitability and Efficiency Metrics - The weighted average return on equity was 10.69%, with an average return on assets of 0.85% and a net interest margin of 1.51% [2] - Capital adequacy ratio was 19.69%, with a core Tier 1 capital ratio of 14.48% [2] - Cost-to-income ratio was 29.58%, indicating a leading position in the industry [2] Strategic Focus and Innovation - The bank is focusing on strengthening its core business, with an increasing share of loans in key sectors such as technology and strategic emerging industries [3] - The scale of asset management reached 5.65 trillion RMB, with custodial assets at 23.95 trillion RMB, maintaining industry leadership [3] - The bank's cloud computing capabilities grew by 9.58%, with 193 financial model applications launched, enhancing its autonomous control [3] Social Responsibility and ESG Rating - The bank is committed to promoting green and low-carbon transitions, achieving the highest MSCI ESG rating of AAA [3]

Core Viewpoint - Construction Bank reported a stable performance in 2024 with a slight decrease in operating income but a modest increase in net profit, emphasizing stability in operations and asset quality [1][2][3] Financial Performance - Operating income for 2024 was 728.57 billion RMB, a year-on-year decrease of 2.29% [1] - Net profit attributable to ordinary shareholders was 328.469 billion RMB, an increase of 0.28% year-on-year [1] - Basic earnings per share stood at 1.31 RMB, with a proposed final dividend of 0.206 RMB per share [1] Asset and Liability Management - Total assets reached 40.57 trillion RMB, with a growth rate of 5.86% [1] - Total liabilities amounted to 37.23 trillion RMB [1] - Non-performing loan ratio was 1.34%, with a provision coverage ratio of 233.60% [1] Loan and Investment Structure - Net loans and advances amounted to 25.04 trillion RMB, an increase of 8.48%, representing a 1.49 percentage point increase in total assets [2] - Bond investment scale reached 10.39 trillion RMB, up 10.71%, with a 1.12 percentage point increase in total assets [2] Profitability and Efficiency Metrics - Return on equity was 10.69%, with an average return on assets of 0.85% and a net interest margin of 1.51% [2] - Capital adequacy ratio was 19.69%, with a core tier 1 capital ratio of 14.48% [2] - Cost-to-income ratio was 29.58%, indicating industry-leading operational efficiency [2] Strategic Focus and Innovation - The bank is focusing on strengthening its core business, with an increasing share of loans in key sectors such as technology and strategic emerging industries [3] - The scale of asset management reached 5.65 trillion RMB, with custodial assets at 23.95 trillion RMB, maintaining industry leadership [3] - The bank's cloud computing capabilities grew by 9.58%, with 193 financial model applications launched [3] Social Responsibility and ESG Rating - The bank is committed to promoting green and low-carbon transformation, achieving the highest MSCI ESG rating of AAA [3]