Xin Lang Cai Jing·2026-01-25 10:27Core Viewpoint - The company shows marginal improvement in performance with a slight increase in net profit and interest income, supported by a robust retail strategy that provides a competitive edge [1][6]. Group 1: Financial Performance - In 2025, the company's operating income increased by 0.01% year-on-year, while net profit attributable to shareholders rose by 1.21%, indicating a positive trend compared to the first three quarters of 2025 [1]. - Total assets, loans, and deposits grew by 7.6%, 5.4%, and 8.1% year-on-year respectively, although the pace of expansion has slightly slowed [2]. - The net interest income for 2025 increased by 2.0% year-on-year, showing a recovery in growth rate compared to earlier in the year [2]. Group 2: Asset Quality and Risk Management - The non-performing loan (NPL) ratio remained stable at 0.94%, with a provision coverage ratio of 392%, indicating solid asset quality [4]. - The company maintains a high level of provision coverage despite a slight decline, reflecting prudent risk management practices [4]. Group 3: Non-Interest Income and Investment Strategy - Non-interest income decreased by 3.4% year-on-year, but there is a marginal improvement in growth rate compared to earlier periods, particularly in wealth management products [3]. - The company plans to adopt a cautious approach in financial investments, focusing on risk management and duration [3]. Group 4: Dividends and Capital Adequacy - The company announced a mid-term dividend of RMB 1.013 per share for the first half of 2025, reinforcing its wealth management capabilities [5]. - As of September, the core Tier 1 capital adequacy ratio stood at 13.93%, slightly down from June, indicating a stable capital position [5]. Group 5: Valuation and Future Outlook - The company projects an EPS of 5.75, 5.96, and 6.22 for 2025-2027, with a target price for A/H shares set at RMB 50.55 and HKD 55.37, reflecting a target PB of 1.02 and 1.00 respectively for 2026 [6]. - The retail strategy is expected to continue providing a competitive advantage, although there are pressures on net interest margins [6].