Xin Lang Cai Jing·2025-09-03 08:30Core Insights - The company reported a year-on-year revenue increase of 3.76% and a slight decline in net profit by 0.85% for the first half of 2025, with an annualized weighted average ROE of 9.11% [1] - The company experienced a quarter-on-quarter improvement in performance, with Q2 revenue and net profit growing by 5% and 0.98% respectively, driven by scale expansion and non-interest income growth [1] - The contribution of overseas business to total revenue and profit increased, with overseas revenue and profit up by 16.54% and 10.88% year-on-year, contributing 23.75% and 26.23% to the group [1] Financial Performance - The company's net interest income decreased by 5.27% year-on-year, primarily due to pressure on net interest margin, which stood at 1.26%, down 14 basis points from the beginning of the year [2] - The yield on interest-earning assets fell by 38 basis points year-to-date, with loan yield down by 49 basis points, while the cost of interest-bearing liabilities improved, decreasing by 26 basis points to 1.86% [2] - Total loans increased by 6.79% compared to the end of the previous year, with domestic RMB loans growing by 7.7% [2] Non-Interest Income and Wealth Management - Non-interest income rose by 26.43% year-on-year, benefiting from a recovery in middle-income and significant growth in foreign exchange gains [3] - The company’s middle-income revenue increased by 9.17%, driven by agency and custody income growth of 23.73% and 10.98% respectively [3] - Retail AUM grew by 6.72% year-to-date, with private banking AUM up by 8.28% [3] Asset Quality and Capital Strength - The non-performing loan (NPL) ratio was stable at 1.24%, with a slight decrease of 1 basis point, while the coverage ratio stood at 197.39% [3] - The core Tier 1 capital adequacy ratio improved to 12.57%, benefiting from a successful capital increase of 165 billion [3] Investment Outlook - The company is positioned as a highly globalized and integrated state-owned bank, playing a significant role in supporting the real economy [4] - The capital increase has strengthened the company's financial position, and the mid-2025 dividend payout ratio is expected to remain at 30% [4] - The projected BVPS for 2025-2027 is 8.27, 8.81, and 9.31 respectively, with corresponding PB ratios of 0.68X, 0.64X, and 0.61X [4]