INDUSTRIAL BANK(SH:601166)2024-08-23 07:40Investment Rating - The report maintains a "Buy" rating for the company [4][8][11] Core Views - The company achieved a revenue of 113 billion yuan in 1H24, a year-on-year increase of 1.8%, and a net profit attributable to shareholders of 43 billion yuan, up 0.9% year-on-year, which exceeded expectations [4][11] - The asset quality remains stable, with a slight increase in the non-performing loan (NPL) ratio to 1.08% in 2Q24, while the provision coverage ratio decreased to 237.8% [4][8][11] - The bank's net interest income grew by 4.2% year-on-year, contributing significantly to revenue stability [4][11] Financial Data and Earnings Forecast - Total operating income (in million yuan) for 2023 is projected at 210,831, with a year-on-year growth rate of 0.51% [3] - The net profit attributable to shareholders for 2024 is expected to be 77,319 million yuan, with a year-on-year growth rate of 0.26% [3] - The bank's return on equity (ROE) is forecasted to be 9.92% in 2024, declining slightly in subsequent years [3] Performance Highlights - The bank's interest income showed a stable growth of 4.2% in 1H24, with a significant contribution from loan growth [4][11] - Non-interest income decreased by 2.6% year-on-year in 1H24, primarily due to a decline in fee income [4][11] - The bank's total loans reached approximately 5.67 trillion yuan in 1H24, reflecting an 8.6% year-on-year increase [11] Asset Quality and Risk Management - The NPL ratio increased slightly to 1.08% in 2Q24, with a provision coverage ratio of 237.8% [4][11] - The bank has maintained a proactive approach to managing asset quality, particularly in the real estate sector, where the NPL ratio rose to 3.65% [8][11] - Credit card asset quality showed marginal improvement, with the NPL ratio decreasing to 3.88% [8][11] Strategic Initiatives - The bank is focusing on enhancing operational efficiency through strategic initiatives aimed at improving customer segmentation and reducing funding costs [4][5] - The bank's corporate loan growth exceeded 15%, with significant contributions from green and technology sectors [7][11] - The bank's deposit costs have decreased, supporting a stable net interest margin of 1.86% in 1H24 [4][11]