The revenue growth rate was stable, and the net profit growth rate declined. Revenue of 17.5 billion yuan was achieved in the first quarter of 2024, up 5.8% year on year. The growth rate fell 0.6 percentage points from last year's annual report, with little change. Net profit for the first quarter was 7 billion yuan, up 6.3% year on year. The growth rate fell 4.4 percentage points from last year's annual report, mainly because the year-on-year increase in asset impairment losses was significantly higher than last year's annual report.
Asset growth has been steady, and loan investment has increased. At the end of the first quarter of 2024, total assets increased 14.3% year-on-year to 2.89 trillion yuan. The growth rate declined somewhat and gradually returned to a reasonable level of endogenous growth. Among them, deposits increased 15.2% year over year to 1.84 trillion yuan, and loans increased 24.2% year over year to 1.36 trillion yuan. There was a marked increase in loan investment in the first quarter over the same period last year, mainly due to an increase in investment in public loans. The core Tier 1 capital adequacy ratio at the end of the first quarter was 9.26%, a slight decrease of 0.38 percentage points from the beginning of the year.
Net interest spreads performed well, and net revenue from handling fees declined year-on-year. The average daily net interest spread disclosed by the company for the first quarter was 1.90%, down 10 bps from the previous year, and the decline was narrower than last year's annual report. On a month-on-month basis, the net interest spread for the first quarter rebounded by 5 bps compared to the fourth quarter of last year, and the company's net interest spread for the past three quarters was relatively stable. The company's net handling fee revenue for the first quarter fell 22.8% year on year, continuing the negative growth in last year's annual report. It is expected to be mainly related to the wealth management business, which is consistent with the overall situation in the industry.
There was a slight increase in the rate of bad generation, and the provision coverage rate declined slightly. The estimated annualized bad generation rate for the first quarter increased 0.33 percentage points year over year to 1.27%. The company's non-performing rate at the end of the first quarter was stable at 0.76%, and the attention rate increased slightly by 0.09 percentage points from the beginning of the year to 0.74%. The company's provision coverage rate at the end of the first quarter was 432%, down 29 percentage points from the beginning of the year; the loan ratio at the end of the first quarter was 3.27%, down 0.23 percentage points from the beginning of the year. In terms of provision calculation, the company's “loan loss preparation accrual/bad generation” in the first quarter was 80%, and loan loss preparation efforts have weakened.
Investment advice: We keep our profit forecast unchanged. We expect net profit from 2024-2026 to be 274/295/31.9 billion yuan, a year-on-year growth rate of 7.3/7.7/ 8.1%; diluted EPS is 4.03/4.35/4.71 yuan; the current stock price corresponds to PE 5.7/5.2/4.8x and PB is 0.76/0.67/0.60x, maintaining a “buy” rating.
Risk warning: The weakening macroeconomic situation may adversely affect the quality of bank assets.