以量补价抵御行业波动，盈利提升仍有空间。农行受益于县域金融的战略和扎实的客户基础，深耕主责主业，在过去几年较好的平抑了资产端规模波动，在“资产荒”背景下仍然维持了较高的规模增速。2019-2023 年间，农行贷款复合增速为14.1%，高于可比同业平均1.9 个百分点，体现出农行在资产荒背景下积极主动获取资产，扩张资产规模的能力。农行资产稳健扩张主要源自县域金融丰富的信贷需求，19-23 年间农行县域金融贷款复合增速为17.8%，高于全行贷款3.7 个百分点，给予全行贷款较大的驱动力。静态来看，截至2024 年半年末，我们测算的农行算术平均年化ROE 为11.5%，位于上市国有大行中第二位。拆分来看，利息收入以及净息差水平基本持平可比同业，资产质量整体稳健，但非息收入占比较低，我们认为未来农行非息业务仍有较大发展空间。Ping An's point of view:
Company Overview: A major state-owned company focusing on the three rural areas. The Agricultural Bank first originated from the needs of China's agricultural development. It is a major state-owned bank with a long history. Since its establishment, the Agricultural Bank has gone through important stages of development such as restructuring, transformation, and listing, and has gradually developed into an important large-scale state-owned commercial bank in China, and is also one of the systemically important banks in the world. By the end of the third quarter of '24, the Agricultural Bank's assets had reached 43.6 trillion yuan, and the deposit and loan sizes were 29.3 trillion yuan and 24.7 trillion yuan respectively. It is the second largest commercial bank in China. Judging from the shareholding structure, the Agricultural Bank's equity structure is stable, and Central Huijin and the Ministry of Finance are absolute controllers. Judging from the history of current agricultural bank executives, agricultural bank executives all have rich banking experience and management experience, and have a solid foundation of employment. The stable shareholding structure and experienced executive team all lay a solid foundation for the long-term steady operation of the Agricultural Bank.
The differentiated advantages of the agricultural customer base have been stabilized, and the county's profit contribution has steadily increased. Compared to other major banks, the Agricultural Bank has embarked on a differentiated development path focusing on agricultural services based on its innate strategic positioning. Over the past few years, the Agricultural Bank has further deepened its strategic position of serving the three agricultural sectors and rural revitalization, favoring resources towards the county area. On the other hand, the organizational structure revolves around the strategy to further separate the functions of the three agriculture sector, improving efficiency through professional division of labor, and has achieved good results. By the end of 2016, the Agricultural Bank covered 0.87 billion individual customers, ranking first among major banks. In terms of profitability, the annualized operating profit of the agricultural bank's county sector accounts for 1.38% of total assets, which is 0.63 percentage points higher than the bank's overall, and the deposit and loan interest spread is 2.07%, which is higher than the bank's 23BP. The quality is also superior to that of the entire bank. At the end of 2016, the county's defect rate was 1.12%, lower than the bank's 20BP, making it an important engine driving the bank's profit growth.
With volume compensation to withstand industry fluctuations, there is still room for profit improvement. The Agricultural Bank has benefited from the county's financial strategy and solid customer base, and is deeply involved in its main business. It has successfully calmed down asset-side scale fluctuations in the past few years, and has maintained a high large-scale growth rate in the context of an “asset shortage.” In 2019-2023, the compound growth rate of agricultural bank loans was 14.1%, 1.9 percentage points higher than the comparable industry average, reflecting the ability of the Agricultural Bank to proactively acquire assets and expand the size of assets in the context of scarce assets. The steady expansion of the agricultural bank's assets is mainly due to abundant financial credit demand in the county. The compound growth rate of agricultural bank financial loans in 19-23 was 17.8%, which is 3.7 percentage points higher than the bank's loans, giving the bank a major driving force for loans. From a static perspective, as of the end of the year 2024, the agricultural bank's arithmetic average annualized ROE was 11.5%, ranking second among major listed state-owned banks. Looking at the breakdown, interest income and net interest spreads are basically flat and comparable to peers. Overall asset quality is stable, but the share of non-interest income is relatively low. We believe that the agricultural bank's non-interest business still has a lot of room for development in the future.
Counties support profits and focus on dividend values. As one of the major domestic state-owned banks, the Agricultural Bank is at the top of the industry in terms of size, number of customers, and number of branches. The Agricultural Bank insists on targeting the three rural areas, focusing on serving rural areas, and taking county finance as the company's key strategy and development direction. In recent years, against the backdrop of the banking industry as a whole facing increasing internal and external challenges, the Agricultural Bank has maintained a relatively rapid pace of expansion and actively invested in credit to support performance growth. The share of county finance in the entire bank has gradually increased, and it has become an important strategic growth pole for the Agricultural Bank. The profitability of county finance is strong, interest spreads on deposits and loans are higher than those of the entire bank, and the asset quality is excellent, and the capital adequacy ratio and provision coverage are good, driving the bank's scale growth rate and profitability. In the current context where risk-free interest rates continue to decline, the agricultural bank's fixed income value is also worth paying attention to. As of November 12, 2024, the company's dividend rate was 5.55%. Compared to risk-free interest rates, the dividend premium ratio is at an all-time high, and the dividend appeal is outstanding. We expect the company's 24-26 EPS to be 0.80/0.82/0.87 yuan, respectively, with profit corresponding to a year-on-year growth rate of 3.4%/3.6%/5.1%. On November 12, 2024, the company's A-share stock price corresponds to the company's 24-26 PB of 0.64x/0.59x/0.55x, respectively, for the first time coverage.
Risk warning: 1) The economic downturn has caused pressure on asset quality to exceed expectations; 2) net interest spreads have narrowed beyond expectations due to declining interest rates; 3) Financial policy regulation risks.
