关注：（1）息差收窄。23 年净息差1.67%，较23H1 收窄3bp。23 年下半年生息资产收益率下降8bp，主要是贷款下降14bp ；下半年计息负债成本率下降2bp，得益于存款挂牌利率下调和存款期限结构优化，下半年存款成本率下降3bp。展望24 年，受存量贷款重定价、新发利率下行等因素影响，预计资产端仍承压，但随着存款挂牌利率下调成效持续和存款期限结构调整，负债成本率有望保持下降，有助于维稳息差。（2）零售贷款不良率上行。23 年/24Q1 末不良率为0.97%/0.99%，基本保持稳定；关注率分别为1.23%/1.27%，较前期明显提升，但23年逾期率较23H1 末下降11bp，因此关注率上行可能为金融资产风险分类新规落地后，部分重组贷款分类到关注类所致。分板块来看，23年对公不良率改善，但零售不良率较23H1 上升18bp，关注后续风险暴露。24Q1 拨备覆盖率为381.84%，拨备安全垫夯实。Core views:
The Shanghai Agricultural Commercial Bank released its 2023 annual report and the first quarter report of 2024. Revenue, PPOP, and profit to mother grew by 3.1%, 3.2%, and 10.6%, respectively; 24Q1 revenue, PPOP, and net profit to mother increased by 3.7%, 5.9%, and 1.5%, respectively. Judging from the cumulative performance drivers in 2023, factors such as scale expansion, net handling fee revenue, other income and expenditure, reduction in effective tax rates, narrowing of net interest spreads, and cost-to-revenue ratios have caused a certain drag. The 2024Q1 cost-revenue ratio has rectified, and fees and provision contributions have turned negative.
Highlights: (1) Steady growth in scale. On the asset side, the year-on-year growth rate of 23/24Q1 loans was 6.1%/6.1%, respectively, and the scale growth rate slowed to pursue balance between quantity, price, and quality. Structurally, it is mainly for the princess. The size of public loans increased 8.6%/6.6% year-on-year in 23/24Q1, providing major increases in wholesale and retail, manufacturing, and infrastructure. Personal loans declined in size due to early mortgage repayments and a contraction in the credit card business. (2) High growth in other non-interest income. The year-on-year growth rates of the company's other non-interest income in '23/24Q1 were 26.8% and 66.1%, respectively. In '23, thanks to traders' profit and loss from changes in fair value, 24Q1 benefited from high growth in investment income and asset disposal income. (3) Significant increase in capital adequacy ratio. The new capital regulations were officially implemented at the beginning of the year. At the end of 24Q1, the company's risk-weighted assets decreased by 38 billion yuan compared to the end of 23, and the core Tier 1 capital adequacy ratio at the end of 24Q1 was 14.49%, an increase of 1.17 pct over the end of 23. The new capital regulations contributed significantly.
Concern: (1) Interest spreads have narrowed. Net interest spread for '23 was 1.67%, 3bps narrower than 23H1. The yield on interest-bearing assets fell by 8 bps in the second half of '23, mainly by 14 bps in loans; the cost ratio of interest-bearing debt fell by 2 bps in the second half of the year. Thanks to the reduction in deposit listing interest rates and the optimization of deposit term structures, the deposit cost ratio fell 3 bps in the second half of the year. Looking ahead to 24 years, the asset side is expected to remain under pressure due to factors such as repricing of existing loans and declining interest rates, but as deposit listing interest rates continue to reduce and deposit term structure adjustments, the debt cost ratio is expected to continue to decline, which will help stabilize interest spreads. (2) The retail loan non-performing rate is rising. The non-performing rate at the end of 23/24Q1 was 0.97%/0.99%, which remained stable; the attention rate was 1.23%/1.27%, respectively, which was a significant increase from the previous period, but the 23-year overdue rate decreased by 11 bps from the end of 23H1. Therefore, the rise in interest rates may be due to the classification of some restructuring loans into the category of concern after the implementation of the new financial asset risk classification regulations. By sector, the non-performing ratio improved in 23, but the retail defect rate increased by 18 bps compared to 23H1, focusing on subsequent risk exposure. The 24Q1 provision coverage rate was 381.84%, and the provision safety pads were consolidated.
Profit forecast and investment advice: The net profit growth rate of the company in 24/25 is expected to be 3.2%/4.5%, EPS is 1.30/1.36 yuan/share, respectively. The current stock price corresponds to the 24/25 PE of 5.44X/5.21X, respectively, and the corresponding 24/25 PB is 0.56X/0.52X, respectively. Taking into account the company's historical PB (LF) valuation center and fundamentals, the company maintains a reasonable value of 9.25 yuan per share, corresponding to the 24-year PB valuation of about 0.7X, maintaining a “buy” rating.
Risk warning: (1) Macroeconomics declined more than expected, and asset quality deteriorated sharply. (2) Consumption recovery fell short of expectations, and deposit regularization was serious. (3) Market interest rates are rising, and transaction books are at a loss.
