The revenue and profit growth rate did not change much from the previous period. The company achieved operating income of 50.8 billion yuan in the first three quarters of 2024, up 7.4% year on year. The growth rate rebounded 0.3 percentage points from the first half of the year, with little change; in the first three quarters, net profit to mother was 20.7 billion yuan, up 7.0% year on year. The growth rate rebounded 1.6 percentage points from the first half of the year, and performance growth was steady. The annual weighted average return on net assets for the first three quarters was 14.1%, down 1.5 percentage points from the same period last year.

The asset growth rate is not low. At the end of the third quarter of 2024, total assets increased 14.9% year-on-year to 3.07 trillion yuan. The asset growth rate remained close to the average for the past two years. Judging from the current ROE and dividend rate, this asset growth rate is not low. Among them, total loans increased 19.6% year on year, and deposits increased 18.1% year on year, all maintaining a high growth rate. Loan growth in the first three quarters mainly came from loans to public loans, which is in line with the overall trend of the industry. The company's core Tier 1 capital adequacy ratio at the end of the third quarter was 9.43%, down 0.21 percentage points from the beginning of the year.

Net interest spreads are relatively stable, and net interest income has increased significantly. The average daily net interest spread disclosed by the company for the first three quarters was 1.85%, a year-on-year decrease of only 4 bps. It is estimated that it is still mainly affected by the decline in loan interest rates. Among them, the net interest spread for the past five quarters basically fluctuated around 1.85%. The net interest spread for the third quarter was 1.81%, down 3 bps from month to month, but it was the same as the third quarter of last year, and the net interest spread was relatively stable. Benefiting from better net interest spread performance, the company's net interest income increased 16.9% year over year.

Net income from handling fees declined year on year, and other non-interest income remained stable. The company achieved net processing fee revenue of 3.7 billion yuan in the first three quarters, a year-on-year decrease of 30.3%. It is estimated that it is still affected by capital market fluctuations, and wealth business revenue declined year on year. The company's other non-interest revenue for the first three quarters totaled 11.7 billion yuan, which remained stable year over year.

The rate of bad generation has increased, and provision coverage has declined. The company's defect rate at the end of the third quarter was 0.76%, the same as at the end of the second quarter and the beginning of the year; the attention rate at the end of the third quarter was 1.08%, up 0.06 percentage points from the end of the second quarter and 0.43 percentage points higher than at the beginning of the year. The bad generation rate in the first three quarters was 1.26%, up 0.37 percentage points from the previous year. The company's provision coverage rate at the end of the third quarter was 405%, down 16 percentage points from the end of the second quarter and 76 percentage points from the beginning of the year.

Investment advice: The company's overall performance has not changed much from the interim report. We expect the company's net profit to be 27.4/29.5/31.9 billion yuan in 2024-2026, with a year-on-year growth rate of 7.3%/7.7%/8.1%; diluted EPS is 4.03/4.35/4.71 yuan; PE corresponding to the current stock price is 6.4/6.0/5.5x and PB is 0.86/0.77/0.69x, maintaining the “superior to the market” rating.

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