Industrial Bank Co.Ltd(601166) (601166)
Event overview
On December 15, 2021, Industrial Bank Co.Ltd(601166) announced that the application for convertible bond issuance was approved by the CSRC.
Event comments
1. Convertible bonds will be promoted and accelerated. Only nine days after the approval of the issuance and Examination Commission, Industrial Bank Co.Ltd(601166) convertible bonds obtained the approval of the CSRC, and the promotion speed of convertible bonds was the fastest since 2010. Industrial Bank Co.Ltd(601166) the progress of capital replenishment is accelerated, and it is expected to be issued smoothly by the end of the year. On this premise, it is estimated that the trigger price of compulsory redemption of convertible bonds is 33.15 yuan. If 50 billion convertible bonds are converted into shares, it can supplement Industrial Bank Co.Ltd(601166) core tier 1 capital by 0.8pc to 10.36%.
2. Strategy implementation. Industrial Bank Co.Ltd(601166) the implementation of the strategy has entered the comprehensive promotion stage from the drawing sample stage, and is expected to continue to make efforts in the three fields of green finance, wealth management and investment banking. The promotion of the strategy involves the investment of on balance sheet assets and needs the support of capital ammunition. After the implementation of convertible bonds, if the convertible bonds are successfully converted into shares, it is expected to catalyze the implementation of the strategy and drive the operating performance to exceed expectations.
3. The best buying point has appeared. Industrial Bank Co.Ltd(601166) among high-quality banks, the cost performance is the most prominent, and the emotional decline brings the best buying point. ① Industrial Bank Co.Ltd(601166) 21q1-3roe reached 14.7%, but as of the latest, Pb was only 0.59x in 2022. Buy high-quality stock banks based on the valuation of state-owned banks, Industrial Bank Co.Ltd(601166) has outstanding cost performance. ② Since December 13, 2021, Industrial Bank Co.Ltd(601166) has decreased by 1.54% due to the disturbance of real estate risk rumors. At present, the end of the real estate policy has been realized, and the good trend of real estate risk remains unchanged. Short term emotional sell-off brings Industrial Bank Co.Ltd(601166) the best buying point and is firmly optimistic.
Profit forecast and valuation
The promotion of convertible bonds was accelerated again, the implementation of strategy was accelerated, and the emotional decline brought the best buying point. 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 RMB 74 / 32.21 / 36.23 shares. The current price corresponds to 0.67/0.59/0.53 times of Pb valuation. Maintain the target price of RMB 33.50, corresponding to pb1.5 in 2021 17x, the current price corresponds to pb0.00 in 2021 67x, 75% of the current price space.
Risk tip: macroeconomic stall and significant exposure of adverse.
