PAB(SZ:000001) ZHONGTAI SECURITIES·2025-03-16 13:06Investment Rating - The report maintains an "Accumulate" rating for the company [3] Core Insights - The company's revenue for 2024 is projected to decline by 10.9% year-on-year, while net profit is expected to decrease by 4.2% [5][9] - The report highlights a structural adjustment in the company's operations, with a focus on improving asset quality and reducing risk appetite [5][32] - The company is expected to benefit from its backing by a comprehensive financial group, enhancing its competitive position in both corporate and retail banking [32] Financial Performance Summary - Revenue and net profit for 2024 are forecasted at 146,695 million and 44,508 million respectively, with year-on-year growth rates of -10.9% and -4.2% [3][9] - The net interest income is projected to decline by 20.8% year-on-year, while non-interest income is expected to grow by 14% [5][9] - The company’s net profit margin is anticipated to stabilize, with a slight improvement in the net interest margin expected in the coming years [5][12] Asset and Liability Management - The company continues to adjust its asset structure, with a notable increase in corporate loans and a reduction in retail loans, reflecting a strategic shift in risk management [18][22] - The proportion of demand deposits has increased, contributing to a decrease in funding costs [22][12] - The overall asset quality is improving, with a reduction in the non-performing loan ratio for retail loans [27][28] Non-Interest Income - Non-interest income is expected to grow significantly, driven by a 68.8% increase in other non-interest income, while fee income is projected to decline by 18.1% [24][5] - The contribution of non-interest income to total revenue is becoming increasingly important, indicating a shift in the company's revenue generation strategy [24][5] Asset Quality - The report indicates a positive trend in asset quality, with a non-performing loan ratio of 1.06% and a decrease in the retail loan non-performing ratio to 1.39% [29][28] - The company has maintained a strong provision coverage ratio of 250.71%, ensuring a buffer against potential loan losses [29][28] Investment Recommendations - The report suggests that the company is well-positioned to capitalize on its structural adjustments and improve asset quality, with projected price-to-book ratios of 0.51X, 0.47X, and 0.44X for 2025, 2026, and 2027 respectively [32][5] - Investors are encouraged to monitor the company's transformation efforts closely, as it aims to evolve into a high-quality bank [32][5]