Xin Lang Cai Jing·2025-08-30 12:31Core Viewpoint - The company's revenue for 1H25 fell short of expectations, while profit growth exceeded expectations due to a significant reduction in asset impairment losses [1] Revenue and Profit Analysis - Revenue decreased by 5.6% year-on-year in 1H25, with a more pronounced decline of 7.0% in 2Q25 [1] - Net profit attributable to shareholders increased by 0.6% year-on-year in 1H25, with a 0.8% increase in 2Q25, reflecting a 0.5 percentage point improvement from the first quarter [1] Development Trends - Net interest income decline narrowed, with total assets, loans, and deposits growing by 6.5%, 4.9%, and 8.5% year-on-year respectively [2] - The average net interest margin for 1H25 was 1.41%, down 15.2 basis points year-on-year, but the decline was less severe than in the first quarter [2] - Non-interest income decreased by 5.6% year-on-year, significantly weaker than the 2.5% growth in the first quarter, primarily due to a 47.2% drop in investment income in 2Q25 [2] Asset Quality and Credit Cost - The non-performing loan (NPL) ratio remained stable at 1.25%, with improvements in corporate and retail loan NPL ratios [3] - The net generation rate of non-performing loans was 1.18%, down 30 basis points year-on-year, contributing to a 26 basis point decline in credit costs to 0.79% [3] - Early warning indicators such as attention and overdue rates decreased compared to the beginning of the year [3] Profit Forecast and Valuation - The company maintains its profit forecasts for 2025 and 2026, with A-shares trading at 0.44x and 0.42x price-to-book ratios for those years [4] - The target price for A-shares is set at 4.58 yuan, indicating a 21% upside potential from the current price [4] - H-shares are trading at 0.37x and 0.36x price-to-book ratios for 2025 and 2026, with a revised target price of 3.85 HKD, reflecting a 10% upside potential [4]