INDUSTRIAL BANK(SH:601166) Guotou Securities·2024-08-23 06:31Investment Rating - The investment rating for the company is "Buy - A" with a target price of 20.53 CNY, maintaining the rating [3]. Core Views - The company's performance in the first half of 2024 met expectations, with revenue growth of 1.80% year-on-year, and net profit growth of 0.86% year-on-year [1][8]. - The growth in net profit was driven by provision releases, scale growth, and cost reductions, while tax increases and declines in non-interest income negatively impacted performance [1][7]. - The bank's asset scale growth has slowed, primarily due to weaker corporate loan demand influenced by macroeconomic conditions [1][2]. Summary by Sections Financial Performance - In Q2 2024, the bank's net profit growth was 6.54% year-on-year, with total assets growing by 4.65% year-on-year [1][8]. - The average balance of interest-earning assets increased by 7.82% year-on-year, while loan growth was 8.55% year-on-year [1][2]. - The bank's net interest margin for Q2 2024 was 1.85%, with a year-on-year decline of 8 basis points [7][8]. Loan and Deposit Analysis - Corporate loans (excluding discounts) contributed 53.32% to total asset growth, with a year-on-year increase of 14.84% [1][2]. - Retail loan growth was weak, with a decline of 0.81% year-on-year, particularly in credit card and mortgage loans [2][8]. - The bank's deposit scale grew by 4.86% year-on-year, with a slight increase in the proportion of demand deposits [2][8]. Asset Quality and Cost Management - The non-performing loan ratio remained stable at 1.08%, with a slight increase in the attention ratio to 1.73% [8][9]. - The cost-to-income ratio improved, contributing positively to profit growth [8][9]. - The bank's provision coverage ratio was 237.82%, indicating a strong buffer against potential loan losses [8][9]. Future Outlook - The bank is expected to continue optimizing its asset structure and increasing lending in key areas such as green finance and technology [8][9]. - Revenue is projected to grow by 0.25% year-on-year in 2024, with net profit growth of 1.04% [8][9].