Event: The company released the 2023 Annual Report & 2024 Quarterly Report. The company achieved revenue of 35.016 billion yuan in 2023, +6.33% year-on-year; net profit to mother was 14.383 billion yuan, +23.15% year-on-year. The weighted average return on net assets was 15.57%, +1.48pct year over year. The non-performing rate is 0.76%; the provision coverage rate is 561.42%. The company achieved operating income of 9.761 billion yuan in 2024Q1, +3.50% year-on-year; net profit to mother was 5.133 billion yuan, +21.11% year-on-year.
Profits continued to rise, and the return on investment was excellent. The company achieved +2.52%/-13.50%/+39.60% of net interest income/intermediate income/other non-interest income in 2023. The company achieved net interest income of 23.433 billion yuan, an increase of 576 million yuan over the previous year, an increase of 2.52%. During the reporting period, the company's profit performance was excellent, mainly due to a year-on-year increase in scale and non-interest income. Among non-interest income, processing fees and commission income were under pressure, down 13.50% year over year. Among other non-interest income, the company achieved investment income of 5.649 billion yuan, an increase of 963 million yuan over the previous year, mainly due to an increase in investment income generated by financial assets, an increase of 20.54%.
The quality of assets is excellent, and the provision rate is high. The company's non-performing rate as of 2024Q1 was 0.76%, the same as at the end of 2023. The ratio of overdue loans to non-performing loans was 87.81%, the ratio of loans overdue for 90 days or more to non-performing loans was 58.39%, and the non-performing loan provision coverage rate was 551.23%. Focus on the increase in loan ratio/overdue rate of 12 bp/4 bps month-on-month. The company's provision coverage rate as of 2024Q1 was 551.23%, maintaining a stable high level, strong safety pads, and sufficient profit margins.
Credit investment has been growing steadily. The company's total assets, loan amount and total deposit amount as of 2024Q1 were +13.04%, +16.05%, and +11.00% year-on-year. The total amount of loans increased by 63.70 billion yuan over the end of 2023. The increase was mainly due to increased investment in public credit. In 2023, the company's 2024Q1 credit to public credit increased by 19.1% and 18.1%, respectively; retail loans increased by 7.8% and 12.1%, respectively. The main reasons for the continued rise in credit are strong demand for regional infrastructure and project construction, excellent performance in government-related businesses, and continuous optimization of the credit structure.
Investment and advice: The company's profits continue to increase, and the investment return performance is excellent; the asset quality is excellent, the provision rate is high; and credit investment is growing steadily. The company's 2024-2026 revenue is estimated at 37.350 billion yuan, 40.326 billion yuan, and 44.227 billion yuan. Achieved net profit of 17.155 billion yuan, 20.459 billion yuan, and 23.71 billion yuan. Net assets per share were $20.06, 23.71, and 27.85, and the PB corresponding to the closing price on June 12, 2024 was 0.65, 0.55, and 0.47 times. Maintain a “buy” rating.
Risk warning: macroeconomic fluctuations, narrowing net interest spreads, deterioration in asset quality