营收、净利润出现向上拐点，净息差企稳。非息收入保持高增势头。24H1 公司营收3171 亿元，YoY-0.67%，较24Q1 收窄。受收益率下探等综合影响，利息净收入YoY-3.09%，约2268 亿元。非息收入方面同比增长5.99%至903 亿元。Incidents:
The Bank of China released its mid-year earnings report for 24 years. In the first half of the year, the company achieved revenue of 317.1 billion yuan, YoY -0.67%, net profit to mother of 118.6 billion yuan, YoY -1.24%; a non-performing ratio of 1.24%, and a non-performing provision coverage rate of 201.69%.
Review summary:
Revenue and net profit showed an upward inflection point, and net interest spreads stabilized. Non-interest income has maintained a high upward trend. 24H1's revenue was 317.1 billion yuan, YoY -0.67%, narrower than 24Q1. Due to the combined effects of declining yields, net interest income YoY -3.09%, or about 226.8 billion yuan. Non-interest income increased 5.99% year over year to 90.3 billion yuan.
In terms of net interest spreads, there is a sign of stabilization. The specific performance is as follows: 1. 24H1 corporate net interest spread was 1.44%, the same as 24Q1, showing strong resilience; 2. Asset return side: In the first half of 2024, the average return on corporate loans fell to 3.70% due to the LPR reduction policy. 24H1 In the case of an increase in loan investment scale (YOY +12.48%), corporate loan interest income was 379.016 billion yuan (YOY +3.02%), and the quantitative price compensation effect was remarkable. 3. Debt cost side: Bank of China 24's average daily deposit balance in the first half of the year accounted for 79% of interest-bearing liabilities, with an average cost ratio of 2.06%.
Profit growth has improved. 24H1 Bank of China's net profit to mother fell 1.24% year on year, an improvement of 1.66 pct compared to 24q1.
Asset side: Referendums drive credit growth and capital flows to industry. The total interest-bearing assets of 24H1 enterprises were 32625.6 billion yuan, up 3.6% from the end of 2023. Among them, interbank assets increased 9.8% from the beginning of the year. Credit situation: The increase in loans to public loans in the first half of '24 was 1.15 percent (up 9.1% from the beginning of the year). Debt side: The debt structure is stable.
The 24H1 interest-bearing debt balance was $27,990.5 billion, up 3.8% from the end of 2023. Deposit situation: 24H1 deposits increased by 3.1% compared to the end of 2023. Deposit growth improved marginally, thanks to a 6.2% increase in retail deposit inflows compared to the end of 23, and 24H1 deposits accounted for 79.9% of total interest-bearing liabilities. In addition, the time deposit side was up 6.3% from the beginning of '24, accounting for 58.3% of total deposits.
Asset quality is stable, and provisions are improving to strengthen safety margins. The 24H1 non-performing loan ratio was 1.24%, down 3 bps from 2023.
Profit Forecast and Valuation:
The Bank of China's 24H1 revenue situation has improved, interest spreads are stabilizing, and high provisions are protecting the future of the enterprise. We forecast a year-on-year increase of 0.67%, 1.68%, and 5.72% in 2024-2026, corresponding to current BPS prices: 8.41, 9.31, and 10.13 yuan. Using the dividend discount model, the estimated target price was 5.90 yuan, corresponding to 0.70x PB in 24 years. The current price space was 28%, which was raised to a “buy” rating.
Risk warning: macroeconomic shocks; non-performing assets may be greatly exposed; interest rate pressure may increase due to a continued decline in interest rates.
