The Company’s shareholders’ net profit was RMB49,788 mn, down 1.6%YoY in 1H20. In 1H20, net interest income was RMB90,873 mn, up 4.0% YoY.
　　Non-interest income increased by 12.5% YoY to RMB57,290 mn. TheCompany’s NPL ratio was 1.14% as of the end of 1H20, down 0.02 pptscompared with the end of 2019. In 1H20, the Company's impairment lossesincreased by 22.3% YoY, which was one of main reasons for the decrease ofshareholders’ net profit. NPL coverage ratio climbed 14.03 ppts comparedwith the end of 2019 to 440.81%.
　　The Company further advanced the exploration of its digital businessmodel, which is expected to contribute to its development in both thenear-term and long-term. In 1H20, the Company maintained sustainableand stable technology investments, and the ratio of the informationtechnology expenses to the Company’s net operating income was 2.87%.
　　The Company has a good customer base and obvious advantages in retailbanking business. Meanwhile, the Company has relatively good asset qualityand high NPL coverage level. In 2H20, the Company’s impairment losses areexpected to remain at a high level, which is expected to impact its earningsnegatively to a certain extent. We revise down EPS estimates for FY20/FY21/ FY22 by 12.8%/ 12.5%/ 10.8%, respectively. We expect EPS for FY20/FY21/ FY22 to grow YoY by -3.8%/ 13.1%/ 15.7% to RMB3.478/ RMB3.933/RMB4.550, respectively. We maintain our "Buy" rating. To reflect thechange of valuations, we revise up our TP to HK$48.56 for the Company,equivalent to 12.3x FY20 PER, 10.9x FY21 PER, 9.4x FY22 PER, 1.7x FY20PBR, 1.5x FY21 PBR and 1.4x FY22 PBR.