INDUSTRIAL BANK(SH:601166) Guotou Securities·2025-05-05 08:19Investment Rating - The investment rating for the company is "Buy-A" with a 6-month target price of 26.01 CNY, compared to the current stock price of 20.87 CNY [7]. Core Views - The company's performance in Q1 2025 showed a decline in operating income by 3.58% year-on-year, with a decrease in pre-provision profit by 4.35% and net profit attributable to shareholders down by 2.22%. The main factors affecting performance were the expansion of interest-earning assets and a decline in net non-interest income [2][10]. - The asset quality remains stable, with a non-performing loan ratio of 1.08% and a provision coverage ratio of 233.42% as of Q1 2025, indicating a reasonable level of asset quality management [10][11]. Summary by Sections Financial Performance - In Q1 2025, the company's total assets grew by 3.65% year-on-year, with total loans increasing by 4.83%. The bank added 123.4 billion CNY in total assets and 78.8 billion CNY in loans during the quarter [3][4]. - The net interest margin for Q1 2025 was 1.80%, showing a year-on-year decline of 7 basis points, while the cost of liabilities decreased, helping to mitigate the impact of declining interest margins [6][10]. Loan and Deposit Structure - Corporate loans showed a year-on-year growth of 6.33%, with a focus on supporting the real economy, particularly in green and technology loans, which exceeded 1 trillion CNY [4][5]. - Retail loan growth was weak, with a year-on-year increase of only 0.96%, and a net decrease of 26 billion CNY in retail loans during the quarter [4]. Non-Interest Income and Cost Management - Non-interest income declined by 12.42% year-on-year, primarily due to a 21.50% drop in investment income, although net fee income increased by 8.54% [10][11]. - The cost-to-income ratio increased slightly to 24.13%, reflecting the impact of declining income [11]. Future Outlook - The company is expected to maintain stable credit issuance while enhancing deposit cost control, with an anticipated decline in net interest margin of around 10 basis points for the year [11]. - Revenue is projected to grow by 0.54% year-on-year in 2025, with net profit growth estimated at 1.91% [11].