Both revenue and profit for the first quarter achieved positive year-on-year growth. The company achieved revenue of $53.77 billion (YoY ,4.69%) and net profit of 19.191 billion yuan (YoY ,0.25%) in the first quarter of 2024. The company's annualized weighted average ROE for the first quarter was 12.57%, down 1.29 percentage points year over year.

The asset growth rate is relatively stable. At the end of the first quarter of 2024, total assets increased 3.23% year on year to 9.07 trillion yuan, and the growth rate was relatively stable. Among them, loans increased 4.42% year over year to 5.58 trillion yuan, and deposits decreased by 0.08% year on year to 5.49 trillion yuan.

Net interest income declined year over year, and net interest spreads continued to narrow. Net interest income for the first quarter was 34.960 billion yuan, down 4.55% year on year, mainly due to factors such as declining interest rates. The return on the asset side declined, and the net interest spread continued to narrow. The net interest spread for the first quarter was 1.70%, down 17 bps year on year.

Net non-interest income grew rapidly, mainly driven by income from financial investment. In the first quarter, we achieved net non-interest income of 18.810 billion yuan, an increase of 27.64% over the previous year. Among them, net revenue from handling fees was 8.376 billion yuan, a year-on-year decrease of 1.99%; investment income of 8.149 billion yuan was realized, an increase of 155.53% over the previous year.

Asset quality remains stable. The company's non-performing loan ratio at the end of the first quarter was 1.18%, the same as at the beginning of the year; the provision coverage rate was 207.79%, up 0.20 percentage points from the beginning of the year. The attention rate at the end of the first quarter was 1.60%, up 0.03 percentage points from the beginning of the year. Overall, the quality of the company's assets remains stable.

The core tier 1 capital adequacy ratio improved month-on-month. The company's core Tier 1 capital adequacy ratio at the end of the first quarter was 9.69%, the Tier 1 capital adequacy ratio was 11.44%, and the capital adequacy ratio was 13.61%. Among them, the core tier 1 capital adequacy ratio increased by 0.70 percentage points from the beginning of the year, and improved from month to month. At the end of March this year, CITIC Financial Holdings had converted all of its 26.388 billion yuan of CITIC convertible bonds into shares, accounting for 65.97% of the total amount of convertible bonds issued.

Investment advice: The company's overall fundamental performance is relatively stable. We keep the company's profit forecast unchanged. The company's net profit for 2024-2026 is 700/72/75 billion yuan, corresponding to a year-on-year growth rate of 4.4%/3.0%/4.0%; diluted EPS is 1.43/1.47/1.53 yuan; PE corresponding to the current stock price is 5.2/5.1/4.9x, and PB is 0.56/0.52/0.48x, maintaining the “increase in holdings” rating.

Risk warning: The weakening macroeconomic situation may adversely affect the quality of bank assets.