Overview: 1. Profit growth rate remained stable: revenue -1.8% YoY, net profit +6.2% YoY. Net interest income was -1.6% YoY, and the growth rate turned negative (+0.1% YoY in 3Q23); net non-interest income fell 2.2% yoy, and the decline narrowed (-5.2% YoY in 3Q23). 2. Net interest in a single quarter was -1.7% month-on-month, and both sides dragged down the month-on-month decline in interest spreads. The yield on annualized interest-bearing assets in a single quarter fell 4 bps to 3.68% month-on-month, and the decline in loan interest rates was the main drag. The interest rate for single-quarter annualized interest-bearing debt increased by 2 bps to 1.75% month-on-month, and the cost of interbank debt was the main drag. 3. Growth rate and structure of assets and liabilities: The capital structure is stable, and Q4 credit investment is increased. Annual interest-bearing assets increased 8.7% year on year; total loans increased 7.2% year on year, and 23Q4 single-quarter credit increased by 117.3 billion yuan, increasing credit investment compared to Q3, and 40.9 billion yuan year-on-year increase over 22Q4. Interest-bearing liabilities increased 9.8% year over year; total deposits increased 11.3% year over year. There was a net increase of 8242 billion dollars in deposits for the whole year, and deposit growth remained at a high level. 4. Refinement of deposits and loans: retail investment is strong throughout the year, real estate pressure continues to drop; activity has increased positively in a single quarter. (1) Loan side: In 2023, new loans were added to the public: retail: notes = 50:59:-10. Stock real estate loans maintained a downward trend in total loans, down 0.2 points to 4.7% month-on-month from 3Q 23, and the share of new retail loans remained high. (2) Deposit side: The two major trends continue - deposit regularization+increase in the share of personal deposits. The highlight is that both public and private accounts have achieved positive growth in a single quarter. 5. The year-on-year decline in net non-interest was narrowed: processing fees were under pressure, and other non-interest rates increased year-on-year. Net non-interest income was -2.2% year-on-year, and the decline was 3 percentage points narrower than in 3Q23.

Among them, net processing revenue fell 10.8% year on year, and was 0.7 points narrower than the 3Q23 year-on-year decline: with the exception of settlement business, all other income declined year over year; agency insurance revenue increased 9.3% year over year, and the rest of the agency business maintained a negative year-on-year increase. The cumulative net other non-interest income increased 28.3% year over year (vs 3Q23 +15.8% year over year). 6. Asset quality: Overall stability, improvement in public relations. The real estate defect rate improved for two consecutive quarters, and retail sales were under slight pressure. (1) Defects: The defect rate decreased by 1 bp to 0.95% month-on-month; the net generation of annualized defects in a single quarter was 0.68%, a decrease of 3 bps month-on-month.

(2) Overdue: The overdue rate was 1.26%, a slight increase of 1 bps over the previous month, and remained stable; among them, the share of loans overdue for 3 months or more in total loans increased by 2 bps to 0.70% month-on-month. (3) Provision: The provision coverage rate was 437.7%, down 8.16 points from the previous month, and remained high. (4) For public sector: The non-performing rate fell 11 bps to 1.15% month-on-month; the non-performing rate for real estate fell 30 bps to 5.01% month-on-month, and has maintained a downward trend for two consecutive quarters. (5) Retail: The defect rate increased by 5 bps to 0.91% month-on-month, but the overall rate is still low. 7. The dividend rate increased by 2 points to 35%, and the capital indicators continued to improve. 8. Retail tracking: Sunflower and private sector customers increased by 12.0% and 10.4%, respectively, and the total AUM exceeded 13 trillion dollars. 9. Public tracking: FPA increased 8.4% year-on-year, and the share of traditional financing increased.

Investment advice: The company's current stock price corresponds to 2024E, 2025E, 2026E PB 0.80X/0.72X/0.65X; PE5.42X/5.28X/5.21X. On the retail and wealth management circuit, CMB has gradually accumulated a “moat of business models”; a “corporate culture” (scarce in the banking industry) formed over a long period of time; and a large number of practical, hardworking, professional, and enterprising “team members” formed by middle and senior management and business backbone. These underlying values have not changed; they are still scarce and excellent banks in the industry, and are worth holding for a long time.

Risk warning: The economic downturn exceeded expectations, and the company's operations fell short of expectations.