INDUSTRIAL BANK(SH:601166) HTSC·2025-06-05 10:20Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 25.60 [9]. Core Views - The company is focusing on optimizing its liability costs and adjusting its asset structure to support the real economy. It aims to reduce low-yield assets and increase general loan issuance, particularly in green, technology, and high-end manufacturing sectors [2][3]. - The company expects a year-on-year decline in new non-performing loans and impairment provisions for the current year [4]. - The establishment of a financial AIC (Asset Investment Company) is expected to enhance the company's bond trading capabilities and integrate group resources to provide comprehensive financial services [3]. Summary by Sections Liability Cost Optimization - The company anticipates further optimization of its liability costs, particularly as higher-cost liabilities mature and are replaced with lower-cost ones. This is expected to improve the cost of liabilities and mitigate the downward pressure on loan pricing, with an estimated annual decline in net interest margin of about 10 basis points [2]. Asset Quality - The asset quality remains stable, with a focus on key areas such as corporate real estate, credit cards, and local government financing platforms. The company expects the peak of new non-performing loans in these areas to have passed, with ongoing monitoring of potential pressures in retail consumer loans and operating loans [4]. Profit Forecast and Valuation - The company maintains its forecast for net profit attributable to shareholders for 2025-2027 at RMB 774 billion, RMB 782 billion, and RMB 801 billion, respectively, with year-on-year growth rates of 0.2%, 1.1%, and 2.5% [5]. - The estimated book value per share (BVPS) for 2025 is RMB 39.39, corresponding to a price-to-book (PB) ratio of 0.60 times. The target PB for 2025 is set at 0.65 times, reflecting a clear strategic goal and potential for valuation premium [5].