Bank of Ningbo(002142) 国信证券·2024-08-29 04:00Investment Rating - The report maintains an "Outperform" rating for Ningbo Bank (002142 SZ) [1][3] Core Views - Revenue and profit growth remained stable with H1 2024 revenue reaching RMB 34 4 billion (+7 1% YoY) and net profit attributable to shareholders of RMB 13 6 billion (+5 4% YoY) [1] - Asset growth remained strong with total assets increasing by 16 7% YoY to RMB 3 03 trillion by Q2 2024 [1] - Net interest margin (NIM) remained relatively stable at 1 87% in H1 2024 with interest income growing by 14 7% YoY [1] - Fee-based income declined by 24 9% YoY due to capital market volatility while AUM grew rapidly to RMB 1 10 trillion (+21 9% YoY) [1] - Non-performing loan (NPL) formation rate increased to 1 28% in H1 2024 while provision coverage ratio decreased to 421% [1] Financial Performance - Revenue is expected to grow at a CAGR of 7 8% from 2024E to 2026E reaching RMB 77 7 billion in 2026E [4] - Net profit attributable to shareholders is forecasted to grow at a CAGR of 7 7% from 2024E to 2026E reaching RMB 31 9 billion in 2026E [4] - ROE is expected to decline gradually from 14 6% in 2024E to 13 5% in 2026E [4] - NIM is projected to remain stable around 1 85% with loan yield declining by 26bps in H1 2024 [1][4] Asset Quality and Capital - NPL ratio remained stable at 0 76% in Q2 2024 while special mention loans ratio increased by 37bps to 1 02% [1] - Core tier 1 capital adequacy ratio stood at 9 61% in Q2 2024 remaining flat compared to the beginning of the year [1] - Loan growth remained robust at 20 6% YoY in H1 2024 driven by corporate loans across various industries [1] Valuation - The stock is trading at 5 1x 2024E PE and 0 68x 2024E PB [1] - EPS is expected to grow from RMB 4 03 in 2024E to RMB 4 71 in 2026E [1][4] - Dividend yield is projected to increase from 3 1% in 2024E to 3 7% in 2026E [4]