The growth rate of revenue performance in the fourth quarter all rebounded. The company achieved revenue of 760.151 billion yuan (YoY, -2.54%) and net profit to mother of 335.577 billion yuan (YoY, +0.88%) in 2024. Combined with the company's revenue falling 3.30% year on year in the first three quarters and profit increasing 0.13% year on year, the revenue performance growth rate for the fourth quarter all rebounded. The company's 2024 weighted average ROE was 10.69%, down 0.87 percentage points year over year.

The slowdown in scale expansion has played a major role in boosting public funds and notes. The company's total assets increased 5.86% year over year to 40.57 trillion yuan in 2024. Among them, deposits and loans increased by 3.73% and 8.33%, respectively. In 2024, additional credit was invested in 1982.7 billion yuan. By segment, public/personal/note loans increased by 8.95%/47.70%/2.38%, respectively, which played a major driving role in public sector and notes. Combined with the company's additional credit investment of 2,386 billion yuan and 2660.8 billion yuan in 2022 and 2023, respectively, new credit growth slowed in 2024. At the investment level, credit investment in key areas related to the “Five Big Articles” has maintained a high increase.

The decline in net interest spreads narrowed marginally, and the growth rate of net interest income rebounded marginally. The company's net interest spread in 2024 was 1.51%, down 19 bps year on year, down 1 bps from the previous three quarters, and the decline narrowed marginally in the fourth quarter. On the asset side, the yield on interest-bearing assets and 3.34% in 2024 were 3.18% and 3.34% respectively, down 27 bps and 48 bps from 2023, respectively, and 9 bps and 21 bps from the first half of the year. On the debt side, the 2024 interest-paying debt cost ratio and deposit cost ratio were 1.85% and 1.65% respectively, down 10 bps and 12 bps respectively from 2023, and 7 bps from the first half of the year. The company's debt side continued to be optimized to ease the downward pressure on interest spreads. In 2024, net interest income fell 4.43% year on year due to factors such as narrowing net interest spreads and insufficient demand for effective credit. In the first three quarters, it fell 5.89% year on year, and net interest income growth rebounded marginally in the fourth quarter.

Non-interest income has been growing steadily, and investment income has contributed greatly. In 2024, the company's net non-interest revenue increased by 5.09% year-on-year, accounting for 21.36% of operating income, an increase of 1.55pcts over the previous year. Among them, net income from handling fees and commissions fell 9.35% year on year, and revenue continued to be under pressure; other non-interest income increased 50.56% year over year, with investment income and fair value changes growing at an impressive rate.

The non-performing rate has been declining steadily, and the quality of assets has remained steady. The company's non-performing loan ratio at the end of 2024 was 1.34%, down 1 bps from the first three quarters; the attention rate was 1.89%, down 18 bps from the first half of the year; the provision coverage rate was 233.60%, down 3.34 pct from the previous three quarters. The quality of the company's assets remains stable.

Investment advice: The company's fundamentals are stable. We combined factors such as the LPR reduction to lower the company's profit forecast and push it forward by one year. The company's net profit for 2025-2027 is 343.3/353.4/368.8 billion yuan (previous forecast value 2025/2026 is 366.7/390.3 billion yuan), corresponding to a year-on-year growth rate of 2.3%/2.9%/4.4%; the PE corresponding to the current stock price is 1.36/1.40/1.46 yuan; the PE corresponding to the current stock price is 6.6/6.4/6.1x, PB was 0.65/0.61/0.57x, which gave the first coverage a “better than the market” rating.

Risk warning: Macroeconomic recovery falls short of expectations and will drag down the company's net interest spreads and asset quality.