EBSCN·2025-08-31 06:32Investment Rating - The report maintains a "Buy" rating for the company [1]. Core Views - The company's revenue and profit growth have improved sequentially, with retail banking contributing significantly, accounting for 56.6% of total revenue [3]. - The company reported a slight year-on-year increase in net profit of 0.3%, with a notable improvement in growth rate compared to the first quarter [3]. - The report highlights a strategic focus on retail banking, which is expected to enhance customer loyalty and experience, thereby strengthening the company's competitive position [10]. Financial Performance Summary - For the first half of 2025, the company achieved operating revenue of 170 billion, a year-on-year decrease of 1.7%, while net profit attributable to shareholders was 74.9 billion, reflecting a slight increase of 0.3% [2]. - The weighted average return on equity (ROE) was 13.85%, down by 1.59 percentage points year-on-year [2]. - Net interest income grew by 1.6% year-on-year, while non-interest income decreased by 6.7%, with the decline in non-interest income narrowing compared to the first quarter [3][8]. Business Segment Analysis - Retail banking and wholesale banking revenues decreased by 0.7% and 5.9% year-on-year, respectively, but the retail banking segment's contribution to total revenue and pre-tax profit increased compared to the previous year [3]. - The company has actively managed its loan portfolio, with a focus on reducing low-yielding assets, resulting in a 9.2% year-on-year growth in interest-earning assets and a 5.5% growth in loans [4][5]. Asset Quality and Capital Adequacy - The non-performing loan (NPL) ratio was 0.93%, a slight decrease from the previous quarter, with a high provision coverage ratio of 410.9% [9][10]. - The report indicates a strong capital position, with the core Tier 1 capital adequacy ratio at 14% and total capital adequacy ratio at 18.56% as of the end of the second quarter [10][30]. Earnings Forecast and Valuation - The company is projected to have earnings per share (EPS) of 6.05, 6.33, and 6.64 yuan for 2025, 2026, and 2027, respectively, with corresponding price-to-book (PB) ratios of 0.94, 0.86, and 0.79 [11][31]. - The report emphasizes the company's strategic goal of becoming a value-driven bank, leveraging its retail business as a key growth driver [10].