INDUSTRIAL BANK(SH:601166) Huachuang Securities·2025-09-01 08:17Investment Rating - The report maintains a "Recommendation" rating for the company with a target price of 27.06 CNY [2][8]. Core Views - The company's revenue decline has narrowed, and asset quality remains stable, with a reported revenue of 110.46 billion CNY for the first half of 2025, a year-on-year decrease of 2.29%, while net profit attributable to shareholders increased by 0.21% to 43.14 billion CNY [2][3]. - The improvement in performance is driven by enhanced non-interest income and provisioning support, contributing positively to net profit [2][3]. - The bank's credit issuance is led by corporate business, with a steady growth rate of 4.1% year-on-year, while retail business is adjusting its structure [2][3]. - The second quarter saw a widening decline in net interest margin, primarily due to downward pricing pressure on assets [2][3]. - Overall asset quality remains stable, with a non-performing loan ratio holding steady at 1.08% [2][3]. Financial Performance Summary - For the first half of 2025, the company reported a revenue of 1104.58 billion CNY, a decrease of 2.29% year-on-year, and a net profit of 431.41 billion CNY, an increase of 0.21% [2][3]. - The non-performing loan ratio remained stable at 1.08%, while the provisioning coverage ratio decreased by 4.9 percentage points to 228.5% [2][3]. - The report forecasts net profit growth rates of 0.7%, 1.98%, and 3.29% for 2025, 2026, and 2027 respectively, with a current price-to-book ratio of 0.61X [2][3][9]. Asset Quality and Risk Management - The non-performing loan ratio is stable at 1.08%, with a slight increase in the corporate loan non-performing rate, particularly in manufacturing and real estate sectors [2][3]. - Retail loan quality is improving, with a decrease in the personal loan non-performing rate to 1.22% [2][3]. - The bank is actively managing risks in key areas, with a significant reduction in new non-performing loans in the corporate sector [2][3].