Morgan Stanley: NDR Takeaways: Clear Drivers for Positive Revenue and Profit Growth in 2026
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Following a non-deal roadshow, Morgan Stanley reports that Ping An Bank (000001.SZ) management projects positive revenue growth for 2026, with profit growth potentially outpacing revenue expansion. This outlook is underpinned by improving credit quality and lower credit costs. For 2026, management targets 10% corporate loan growth and flat retail loan growth, while planning to reduce low-yield bills by RMB 100 billion. The net interest margin (NIM) is expected to stabilize around 1.75% (compared to 1.78% in 2025) with potential upside from lower funding costs and new economy lending opportunities. Fee income is set for moderate growth, supported by mid-to-high teens growth in agency fees. Asset quality continues to improve, highlighted by five consecutive quarters of retail loan improvement and largely digested property risks. Mortgage and new retail loan non-performing ratios remain low at 0.28% and 0.50% to 0.60%, respectively. Credit costs may decrease by another 10 basis points in 2026. With a stable payout ratio, the anticipated 2026 dividend yield of 5.5% offers attractive downside support. Morgan Stanley maintains an Overweight rating with a target price of RMB 15.20. As of April 3, 2026, the stock closed at RMB 11.12.