BANK OF CHINA(601988) 浙商证券·2025-03-27 06:22Investment Rating - The investment rating for the report on China Bank is "Buy" (maintained) [8] Core Views - The report highlights a recovery in profit growth for China Bank in 2024, with a year-on-year increase in net profit attributable to shareholders of 2.6% and a revenue growth of 1.2%. The improvement in asset quality and strong performance in overseas operations are also noted [1][2][5] Summary by Relevant Sections Performance Overview - In 2024, China Bank's net profit attributable to shareholders increased by 2.6% year-on-year, while revenue grew by 1.2%. The non-performing loan ratio at the end of 2024 was 1.25%, a decrease of 1 basis point from the end of Q3 2024, and the provision coverage ratio rose to 201%, an increase of 2 percentage points [1][2][4] Profit Growth Recovery - The bank's revenue growth of 1.2% in 2024 showed a slight slowdown compared to previous quarters, primarily due to a decline in net interest margin. However, net profit growth of 2.6% was supported by cost control and increased tax contributions. The net interest margin for Q4 2024 was 1.35%, up 2 basis points from the previous quarter [2][3] Asset Quality Improvement - The non-performing loan ratio improved slightly, with a decrease of 1 basis point in Q4 2024. The provision coverage ratio increased by 2 percentage points, indicating better asset quality overall. However, retail non-performing loans showed upward pressure, particularly in mortgages and business loans [4] Strong Overseas Business - China Bank's overseas operations showed robust performance, with a year-on-year growth of 9.2% in the scale of overseas institutions, outpacing domestic growth. The non-performing loan generation rate for overseas institutions decreased by 22 basis points to 0.65%, and the pre-tax ROA for overseas operations was 0.99%, higher than domestic operations [5] Earnings Forecast and Valuation - The forecast for net profit growth for China Bank from 2025 to 2027 is -0.46%, 0.79%, and 4.74%, respectively. The target price is set at 6.03 CNY per share, corresponding to a PB ratio of 0.69 for 2025. The current price is 5.48 CNY per share, indicating a potential upside of 10% [6][12]