Earnings continued to grow in the first quarter. The company achieved revenue of 34.487 billion yuan (YoY, -9.62%) and net profit to mother of 12.426 billion yuan (YoY, +0.39%) in the first quarter of 2024. The company's annualized weighted average ROE for the first quarter was 9.45%, down 1.00 percentage points year on year.
The expansion of scale has slowed somewhat. At the end of the first quarter of 2024, total assets increased by 3.03% year-on-year to 6.90 trillion yuan, and the asset growth rate fell 4.47 percentage points from the full year of 2023. Among them, loans increased 5.25% year on year to 3.83 trillion yuan, and deposits increased 0.04% year on year to 4.12 trillion yuan. The company's capital adequacy ratio at the end of the first quarter was 13.70%, the Tier 1 capital adequacy ratio was 11.54%, and the core Tier 1 capital adequacy ratio was 9.38%, all of which met regulatory requirements.
Net interest spreads continued to narrow, and net interest income declined year over year. Net interest spreads continued to narrow. The estimated net interest spread for the first quarter was 1.58%, down 27 bps year on year, down 16 bps from the full year of 2023. Affected by factors such as the narrowing of net interest spreads, net interest income for the first quarter was 24.192 billion yuan, down 11.72% year on year.
Net income from handling fees and commissions continued to decline. Net revenue from handling fees and commissions was $5.498 billion in the first quarter, a year-on-year decrease of 24.80%. Net revenue from fees and commissions fell 11.39% year-on-year for the full year of 2023, and this downward trend continued in the first quarter of 2024.
Asset quality has remained steady, and provisions have increased. The company's non-performing loan ratio at the end of the first quarter was 1.25%, the same as at the beginning of the year; the provision coverage rate was 185.10%, up 3.83 percentage points from the beginning of the year. Overall, the quality of the company's assets has remained stable.
Investment advice: The company's overall fundamental performance is relatively stable. We keep the company's profit forecast unchanged. We expect the company's net profit to be 386/387/40.5 billion yuan for 2024-2026, corresponding to a year-on-year growth rate of -5.4%/0.2%/4.7%; diluted EPS is 0.57/0.60 yuan; PE corresponding to the current stock price is 5.2/5.1/4.9x, and PB is 0.37/0.35/0.33x, maintaining the “gain” rating.
Risk warning: Macroeconomic recovery falls short of expectations and will drag down the company's net interest spreads and asset quality.