Investment Rating - The investment rating for Qingdao Bank is "Buy" [1] Core Views - Qingdao Bank's performance is strong, with a focus on expanding its scale, optimizing its structure, and reducing costs, leading to continuous improvement in asset quality and a decrease in non-performing loans [2][3] - The bank's total assets reached 765.57 billion, a year-on-year increase of 14.44%, while total loans grew by 13.34% to 375.30 billion [2] - Interest income continues to grow, with net interest income for the first three quarters of 2025 at 8.14 billion, up 12.00% year-on-year [2] - Non-interest income faced pressure, decreasing by 10.72% year-on-year to 2.87 billion, primarily due to fair value changes [2] - The non-performing loan ratio decreased to 1.10%, with a provision coverage ratio of 269.97%, indicating improved asset quality [3] Summary by Sections Financial Performance - For the first three quarters of 2025, Qingdao Bank achieved operating income of 11.01 billion, a 5.03% increase year-on-year, and a net profit attributable to shareholders of 3.99 billion, up 15.54% [1][2] - The annualized return on average equity was 13.16%, an increase of 0.48 percentage points year-on-year [1] Asset and Liability Management - As of Q3 2025, total liabilities were 718.42 billion, a year-on-year increase of 14.87%, with a focus on improving the quality of liabilities and expanding deposit sources [2] - The bank's net interest margin was 1.68%, reflecting efforts to stabilize margins despite challenges in asset yields [2][3] Profit Forecast - The forecast for net profit growth from 2025 to 2027 is 19.5%, 18.52%, and 19.98%, respectively, with expected EPS of 0.88, 1.04, and 1.24 [3][4]

Core Viewpoint - The overall performance of Industrial Bank in the first half of 2025 has outperformed the market and met expectations, with a slight increase in net profit despite a decline in revenue [2]. Financial Performance - In the first half of 2025, Industrial Bank achieved revenue of 110.46 billion yuan, a year-on-year decrease of 2.29%, with the decline narrowing compared to the first quarter; net profit attributable to shareholders increased by 0.21% to 43.14 billion yuan; total assets reached 10.61 trillion yuan, growing by 1.01% from the end of 2024; non-performing loan ratio stood at 1.08% [1]. Net Interest Margin Trends - The net interest margin for the first half of 2025 was 1.75%, down by 0.11 percentage points year-on-year, but the decline is expected to slow down; net interest income was 73.76 billion yuan, a decrease of 1.52% year-on-year [3]. - The bank anticipates that the decline in net interest margin will be controlled within 10 basis points for the entire year, with efforts to reduce the decline in net interest income compared to the first half [3]. Asset Quality Outlook - The new non-performing loans in the first half of 2025 remained stable compared to the same period last year, with risks in real estate and credit cards subsiding, while manufacturing and retail credit risks have slightly increased [4]. - The bank expects the overall asset quality to remain within the anticipated range for the year, with a decrease in new non-performing loans compared to the previous year [4]. Loan Structure Adjustment - The bank's loan growth was lower due to weak market demand and a focus on risk control; significant adjustments were made in the loan structure, with a decrease of over 100 billion yuan in loans to the real estate sector and a reduction in retail loans [5]. - For 2025, the bank aims to achieve a new loan target of 300 billion yuan for corporate finance while improving retail loans under risk control [5]. Industry Trends - The "anti-involution" trend in the banking industry is gaining attention, which may provide opportunities and challenges for loan issuance and pricing; it is expected to alleviate the downward pressure on asset yields [6][7]. - The bank plans to enhance its professional service capabilities and optimize business processes to improve customer experience in a regulated market environment [7].