AGRICULTURAL BANK OF CHINA(601288) 海通证券·2024-11-08 12:49Investment Rating - The investment rating for Agricultural Bank of China (601288) is "Outperform the Market" and is maintained [1] Core Views - The report highlights that Agricultural Bank of China has maintained robust profitability, with a revenue growth rate of +1.3% and a net profit growth rate of +3.4% for the first three quarters of 2024. The revenue in Q3 2024 increased by +3.4% year-on-year, while the net profit rose by +5.9% compared to Q3 2023, indicating an upward trend from Q2 2024 [4][5] - The asset quality remains stable, with a non-performing loan ratio of 1.32% in Q3 2024, unchanged from the previous quarter. The provision coverage ratio stands at 302.36%, reflecting a strong risk mitigation capability [4] - The net interest income growth has improved, with a year-on-year increase of +2.6% in Q3 2024, compared to +1.0% in Q2 2024. The net interest margin for Q1-3 2024 is reported at 1.42% [4] Summary by Sections Financial Performance - For the first three quarters of 2024, Agricultural Bank's revenue growth was +1.3%, and net profit growth was +3.4%. In Q3 2024, revenue and net profit increased by +3.4% and +5.9% year-on-year, respectively [4] - The bank's total loan amount increased by +10.54% year-on-year as of the end of Q3 2024, with corporate loans up by +11.52% and personal loans by +8.26% [5] - The forecast for EPS from 2024 to 2026 is projected at 0.74, 0.76, and 0.79 yuan, with net profit growth rates of 2.58%, 2.52%, and 3.72% respectively [5] Valuation - The report estimates a reasonable value range for the bank between 5.18 and 5.54 yuan, based on the DDM model and PB-ROE model, with corresponding PE ratios for 2024 estimated at 5.85-7.48 times [5][6] - The bank's average return on equity (ROE) is projected to decline from 11.30% in 2023 to 9.66% by 2026 [6][15] Market Comparison - The report includes a comparison of Agricultural Bank's valuation metrics with peer banks, indicating a PB ratio of 0.70 times for 2024E, which is higher than the average of comparable companies [7][15]