\u3000\u3000 Industrial Bank Co.Ltd(601166) (601166)
Event: it was announced on the evening of February 21 that the heads of some subsidiaries, branches and departments of the head office (including their spouses and children) voluntarily purchased 16932900 shares of the company’s shares from the secondary market with their own funds from January 13 to February 18, with a transaction price range of RMB 20.36 to 23.08 per share.
Employees increase their holdings independently, reflecting their confidence in the future development of the company. 1. This increase is the purchase of shares by the company’s internal employees with their own funds. The main buyers are important personnel of Industrial Bank Co.Ltd(601166) business lines (heads of some subsidiaries, branches and head office departments and their families). From January 13 to February 18, they bought a total of 16932900 shares, accounting for 0.086% of the current total circulating share capital of Industrial Bank Co.Ltd(601166) A shares. The total amount of increase calculated at the interval average price is 370 million yuan. 2. Industrial Bank Co.Ltd(601166) the shareholding of senior executives ranks third in the stock bank, and the total shareholding of senior executives is 0.009%. This time, employees at the business level buy the company’s shares with their own funds, reflecting the company’s great confidence in the company’s future short-term performance and long-term development from the management to the business backbone, and helping to boost the company’s future valuation center.
The performance of the company has increased rapidly in 21 years, and the asset quality has continued to improve. Industrial Bank Co.Ltd(601166) in 2021, the year-on-year growth rate of cumulative revenue and net profit remained upward, and the growth rate of net profit attributable to the parent achieved a high year-on-year growth of 24%. In the fourth quarter, loans continued to increase by 2.7% month on month under the high base in the third quarter, and the proportion of loans in total assets increased to 51.5% month on month. Asset quality continues to improve at an excellent level month on month, with limited pressure on asset quality in the future. The non-performing rate continued to decline 2bp to 1.10% month on month on the basis of the low level in the third quarter, the best level since the end of 2014. The net generation of non-performing assets in a single quarter increased to 1.05% month on month, the provision coverage continued to be consolidated, and the safety margin was high.
The issuance of 50 billion convertible bonds was completed, which effectively supported the company’s future performance growth after the full conversion of shares. At the end of last year, the company has completed the issuance of 50 billion convertible bonds, with a conversion price of 25.51 yuan. According to static calculation, after the full conversion, the core tier one capital adequacy ratio will increase by 0.83 percentage points to 10.37% compared with 3q21. The replenishment of capital by convertible bonds can support the company’s risk assets to maintain better growth and serve the real economy. On the basis of internal profit supplement, capital consolidation through external capital supplement can not only meet the regulatory requirements, but also provide a solid capital foundation for the future development of the company and improve the overall competitiveness of the company.
Industrial Bank Co.Ltd(601166) profits have maintained high growth, asset quality has been greatly consolidated, and the incremental risk in the future is small. The issuance of convertible bonds to supplement capital has laid a good foundation for the steady growth of subsequent performance, and the company can expect rapid growth in the future. Company 2021e, 2022epb0 79X/0.70X； PE5. 72x / 5.14x (pb0.70x / 0.63x; pe5.99x / 5.45x in the joint-stock bank), the company’s fundamentals are sound, the asset side has strong asset acquisition ability, and the deposit foundation on the liability side is also gradually consolidated. Through the resolution and disposal and structural adjustment in recent years, the asset quality has been at a relatively solid level. In the future, under the strategy of “commercial bank + investment bank”, the net interest income on the balance sheet will remain stable, and the growth of middle income is expected to open space under the background of the development of direct financing outside the balance sheet. The company has a high roe undervalued value. The undervalued value does not include the option of the company’s transformation and upgrading, and the safety margin of investment is very high. It is recommended to actively pay attention to the transformation promotion of the management.
Risk tip: the macro economy is facing downward pressure, the company’s deposit competition is facing pressure, and the operating performance is less than expected.
