INDUSTRIAL BANK(SH:601166) CMS·2025-08-29 02:04Investment Rating - The report maintains a rating of "Accumulate" for the company [5]. Core Views - The company has shown a positive turnaround in performance with a year-on-year increase in net profit of 0.21% in H1 2025, compared to a decline in previous quarters [1]. - The asset quality remains stable, with a non-performing loan ratio of 1.08% as of Q2 2025, unchanged from the previous quarter [3]. - The company is expected to benefit from its wealth management and investment banking business advantages, supported by a strong capital market environment [4]. Summary by Sections Performance - In H1 2025, the company's operating income, pre-provision operating profit (PPOP), and net profit attributable to shareholders showed year-on-year growth rates of -2.29%, -3.08%, and 0.21%, respectively, indicating a positive trend compared to Q1 2025 [1][15]. Non-Interest Income - The company reported a 2.59% year-on-year increase in non-interest income in H1 2025, with retail wealth management and custody services performing particularly well, achieving revenue growth of 13.45% and 9.98%, respectively [2][31]. Interest Margin and Asset-Liability Structure - The total loans and total assets grew by 4.13% and 2.55% year-on-year, respectively, while total deposits increased by 8.89%. The net interest margin for H1 2025 was reported at 1.75%, reflecting relative resilience despite a 7 basis point decline from the beginning of the year [2][3]. Asset Quality - The company maintained a stable asset quality with a non-performing loan ratio of 1.08% and a provision coverage ratio of 228.54% as of Q2 2025. The focus on key risk areas has led to a reduction in new non-performing loans in corporate real estate and credit cards [3][4]. Capital and Shareholder Information - The largest shareholder, the Fujian Provincial Finance Department, converted 8.644 billion yuan of convertible bonds into shares, indicating confidence in the company's fundamentals. The core Tier 1 capital adequacy ratio stood at 9.54% as of Q2 2025, with potential for further improvement if remaining convertible bonds are fully converted [3][4].