中国光大银行（6818 HK,601818 CH）中国光大银行（6818 HK 601818 CH）港股 A股持有 持有捍卫2025年第一季度每股收益正增长

China Everbright Bank(6818 HK/601818 CH) H/A:Hold/Hold:Defending positive1Q25EPS growth China ◆CEBdefended positiveEPS growththanks to lower credit costsdespite larger-than-expectednet interest incomepressure H: MAINTAIN HOLD TARGET PRICE(HKD)PREVIOUS TARGET(HKD)3.403.40 ◆Loan loss reserve as % loans and CET1 ratiodeclinedq-o-q,but fee growth and deposit growth in 1Q25 improved ◆Maintain H/A Hold/Hold ratings and TPs atHKD3.40/RMB3.60 1Q25results-CEB’s EPS rose1.9% y-o-yto RMB0.19 in 1Q25,thanks tothereducedcredit costs.The1Q25 EPSrepresented29.2%/28.9% of2025e HSBC/BBGconsensus.BVPS wasdownmoderately by0.3% q-o-qto RMB8.15. Out of the keyaspects we monitor, we seethree negative,twopositiveandonemixed trends: A: MAINTAIN HOLD TARGET PRICE(CNY)PREVIOUS TARGET(CNY)3.603.60SHARE PRICE(CNY)UPSIDE/DOWNSIDE3.81-5.5%(as of25 Apr 2025) 1.Net interest incomenegative:Net interest incomefellmore than expectedin1Q25, down 6.4% q-o-q despiteaccelerated asset growth.Asset yield may havedeclinedmoresharplythanexpected. 2.Fee and otherincome moderately positive:Fee incomegrowth turned positivein 1Q25,up 3.3% y-o-yfromthe low base in 1Q24 (2024:-19.5% y-o-y). Othernon-interest incomerose1.7% y-o-yin 1Q25. 3.PPOP and cost efficiencymixed:PPOPdropped4.4% y-o-yin 1Q25asrevenue fell 4.0% y-o-y, while costsdeclined3.2% y-o-y in 1Q25.However,thecost-to-income ratiowas up0.2ppt y-o-y to 27.6%in 1Q25. 4.Asset qualitynegative:Loan loss reserve as % loans dropped 8bp q-o-q to2.18%in 1Q25aftera risein 4Q24.NPL ratio waskept flatq-o-qat 1.25%. NPLcoverage ratiofell6.1pptq-o-qto 174.4%.Credit cost onassets was 0.48% in1Q25, lower than 0.59% in 1Q24. 5.Balance sheetmoderatelypositive:Assetsgrew3.9% q-o-q, with loans andinvestmentsup 4.5% q-o-q and 3.6% q-o-q.Interbank assets dropped 10.1% q-o-q.Deposit growth wasstrongerthan expectedin 1Q25, up 5.8% q-o-q. Yiwei Liu*Associate, China BanksThe Hongkong and Shanghai Banking Corporation Limitedyi.wei.liu@hsbc.com.hk+852 2996 6635 6.Capital rationegative:CET1 ratiodropped 42bp q-o-q to 9.40%,partlyreflectingthe 2H24 interim dividend payout in Jan-2025. RWA growth acceleratedin 1Q25,up4.2% q-o-q(1Q24/4Q24: +0.8%/-0.1%q-o-q). Gary Lam*, CFAHead of Greater China Financials ResearchThe Hongkong and Shanghai Banking Corporation Limitedgary.lam@hsbc.com.hk+852 2996 6926 Implications:We see1Q25results asamoderatelynegativeset ofresultsfor CEB.The bankmanaged todefend positive EPS growth in 1Q25with reducedcredit costs,while loan loss reserve as % loansdeclined. Pressure on net interest income lookedlarger than expected. That said, feeincome growth momentum improved in 1Q25 asexpected,andcost control also looked effective.Loan growth accelerated in 1Q25,underpinned by faster deposit growth.Maintain ourHold/Hold ratings and targetprices on CEB’s H/A-shares at HKD3.40 and RMB3.60, respectively. Simon Ling*AssociateGuangzhou * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations HSBC Global Research Podcasts| Listen to our insightsFind out more Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in Issuer of report:The Hongkong and ShanghaiBanking CorporationLimited the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:https://www.research.hsbc.com Valuation Risks Downside risks for H and A sharesinclude:More-than-expected NIM contraction due to derisking of retail loans.Rising asset quality risks related to SMEs and retailcustomers may result in higher-than-expected provisioningrequirement. Slower-than-expected of investor risk appetitemay impactwealth managementfee income. Upside risks forH andA sharesinclude: Better-than-expected capital position, givenCEB’sproactive capitalmanagement. Stronger-than-expected strength in transactionbanking may lead to stronger institutionalcustomerrelationships as well as a deposit franchise. Buffer againstloan losses should improveif there’s a better-than-expectedimprovement in asset quality. Yiwei Liu*| yi.wei.liu@hsbc.com.hk|+852 2996 6635 Disclosure appendix Analyst Certification The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orissuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), andany otherviews or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflecttheir personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to thespecificrecommendation(s) or views cont