Industrial Bank Co.Ltd(601166) Industrial Bank Co.Ltd(601166) in depth report: new decade, new momentum

Industrial Bank Co.Ltd(601166) (601166)

1、 Investment logic

Industrial Bank Co.Ltd(601166) : for banks in the next decade, the promotion of "commercial bank + investment bank" strategy is expected to exceed expectations. The promotion of investment banking strategy of commercial banks, the potential advanced method and the reduction of green risk weight are expected to drive the trend recovery of roe.

2、 Exceed expectations and drivers

Market concerns: ① in terms of model, the investment banking strategy of commercial banks and the logic of Industrial Bank Co.Ltd(601166) model have not been straightened out. ② In terms of assets, under the background of limited urban investment real estate, Industrial Bank Co.Ltd(601166) transformation is difficult.

We believe that: ① in terms of mode, the strategic thinking is clear, the business logic is straightened out, and the promotion is from point to area. ② In terms of assets, we have found the next "urban investment real estate" - green finance.

3、 Catalyst

Issue convertible bonds to supplement capital. Based on the static calculation of the data at the end of 21q3, such as share conversion, the core tier 1 capital adequacy ratio can be improved by 0.82pc to 10.36%.

Strategic promotion and substantive action. Focus on: ① further optimization of management mechanism; ② Construction and implementation of Qianda shopkeeper wealth platform; ③ Substantive progress of xingyin international license.

The results of relevant policies have shown. Focus on: ① supporting policies related to green finance, such as the decline of risk weight and various supporting tools; ② Whether the high-level law may be approved, Industrial Bank Co.Ltd(601166) is the only bank among the top two seven systemically important banks that has not implemented the high-level law; ③ The real estate sector has achieved remarkable results in correcting policy deviations and stabilizing growth.

4、 Profit forecast

It is estimated that the net profit attributable to the parent company from Industrial Bank Co.Ltd(601166) 2021 to 2023 will increase by 24.33% / 15.10% / 15.24% year-on-year, corresponding to bps28 74 / 32.21 / 36.23 yuan shares, with the current price corresponding to 0.68/0.61/0.54 times of Pb valuation. The target price is 33.50 yuan, corresponding to pb1.5 yuan in 22 years 04x, 72% of the current price space.

5、 Risk tips

Macroeconomic stall, a large number of adverse effects were exposed, and the reform did not meet expectations.

 

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