Revenue growth was steady, and net profit decreased year over year. The company achieved revenue of 219.8 billion yuan in the first quarter of 2024, a year-on-year decrease of 3.4%. The growth rate was basically the same as last year's annual report. Among them, net interest income was 161.4 billion yuan in the first quarter, down 4.2% year on year; net profit attributable to mother was 87.7 billion yuan in the first quarter, down 2.8% year on year, and the growth rate fell 3.8 percentage points from last year's annual report.
Total assets are still growing rapidly, and capital is sufficient. Total assets increased 13.2% year-on-year to 47.6 trillion yuan at the end of the first quarter of 2024, and the growth rate is still at a high level. Among them, deposits increased 9.5% year over year to 35.0 trillion yuan, and total loans increased 11.6% year over year to 27.4 trillion yuan. The company's core Tier 1 capital adequacy ratio at the end of the first quarter was 13.78%, the Tier 1 capital adequacy ratio was 15.18%, and the capital adequacy ratio was 19.21%, all of which met regulatory requirements. Among them, the core Tier 1 capital adequacy ratio increased 0.06 percentage points from the beginning of the year.
Net interest spreads rebounded slightly from month to month. The company's average daily net interest spread for the first quarter of 2024 was 1.48%, a year-on-year decrease of 29 bps, mainly due to the effects of the quarterly decline in net interest spreads last year. On a month-on-month basis, the net interest spread for the first quarter of this year increased slightly by 4 bps compared to the fourth quarter of last year.
Net income from processing fees is still declining. Net fee revenue for the first quarter of 2024 fell 2.8% year on year to 39.3 billion yuan, but compared with last year's annual report, the decline narrowed, and the overall trend was consistent with the industry.
Asset quality is stable. According to the five-level classification of loan quality, the company's non-performing loan balance at the end of the first quarter of 2024 was 370 billion yuan, an increase of 17.4 billion yuan over the end of the previous year. The non-performing loan ratio was 1.36%, the same as at the end of the previous year.
The provision coverage rate was 216%, up 2 percentage points from the end of the previous year. Overall, the quality of the company's assets is generally stable.
Investment advice: We keep our profit forecast unchanged. We expect net profit of 3665/3755/392 billion yuan in 2024-2026, with a year-on-year growth rate of 0.7/2.5/ 4.4%; diluted EPS of 0.99/1.01/1.06 yuan; current stock price corresponding to PE is 5.5/5.3/5.1x, and PB is 0.53/0.49/0.46x, maintaining a “buy” rating.
Risk warning: The weakening macroeconomic situation may adversely affect the quality of bank assets.