Zhejiang Merchants Securities: Maintains a "buy" rating for Industrial Bank, with a target price of 25.82 yuan.

Zhejiang Merchants Securities research report pointed out that in the first half of 25H1, the operating revenue and net profit attributable to the parent company of Industrial Bank increased by -2.3% and +0.2% year-on-year, respectively, an improvement of 1.3% and 2.4% compared to 25Q1. In terms of driving factors, the convergence of the non-interest reduction and the increased contribution from impairments benefited the bank's performance. Looking ahead, with the narrowing of the year-on-year decrease in interest margins, it is expected that Industrial Bank's core profitability momentum will enter an improvement track. In terms of interest rates, the cost rates of current and fixed-term deposits in 25H1 decreased by 13bp and 19bp respectively compared to 24H2. Looking ahead, as the further release of deposit rate cut dividends in 25H2, it is expected that the margin of interest rate decline for Industrial Bank will gradually converge, and the drag on profitability from interest rate margins will improve. Benefiting from the improvement in asset quality in key areas, it is expected that the pressure of impairment for Industrial Bank will gradually enter a release channel, supporting a stable and positive trend in profitability. The target price is maintained at 25.82 yuan per share, corresponding to a P/B ratio of 0.66x in 2025, with a current price upside potential of 13%, and a "buy" rating is maintained.