Core Viewpoint - Guosen Securities initiates coverage on CITIC Financial Assets (02799) with a "Neutral" rating, projecting net profit for ordinary shareholders to reach 10.4 billion, 10.9 billion, and 11.0 billion yuan for 2025-2027, representing year-on-year growth of 8.5%, 4.1%, and 1.1% respectively, with corresponding EPS of 0.13, 0.14, and 0.14 yuan, and PE ratios of 7.6, 7.3, and 7.3 times, while PB ratios are 1.70, 1.38, and 1.16 times, suggesting a reasonable stock price range of 1.16-1.28 HKD [1] Financial Performance - In the first half of 2025, CITIC Financial Assets achieved operating revenue (including performance from joint ventures and associates) of 40.2 billion yuan, a year-on-year increase of 19.9%, and net profit from continuing operations of 5.5 billion yuan, up 19.7%, with net profit attributable to ordinary shareholders reaching 6.2 billion yuan, a growth of 15.7%, resulting in an annualized ROE of 21.1% and ROA of 1.1% [1] Asset Scale - As of the end of Q2 2025, the total assets of the company amounted to 1.01 trillion yuan, reflecting a 2.7% increase from the beginning of the year but a 4.2% decrease year-on-year. The non-performing asset management segment's total assets grew by 2.7% from the start of the year, while the asset management and investment segment's total assets increased by 1.6% [2] Segment Performance - The non-performing asset management segment reported a revenue increase of 58.3% year-on-year, primarily due to approximately 21.3 billion yuan in income from investments in China Bank and Everbright Bank. Conversely, the asset management and investment segment saw a significant revenue decline of 85.1%, with its share of revenue before group offsets dropping to 5.6% [3] Credit Costs and Risk Management - The credit cost rate for the first half of the year was 15.3%, a substantial year-on-year increase, attributed to higher credit impairments on debt instruments measured at amortized cost. The significant provisioning has enhanced the company's risk resilience, with a coverage ratio of 270% for debt instruments measured at amortized cost and those measured at fair value, an increase of 44 percentage points from the beginning of the year [4]