\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 166 Industrial Bank Co.Ltd(601166) )
Highlights of the financial report: 1. The annual growth rate of revenue remained upward, and the net profit achieved the best level in recent ten years. The revenue of the whole year continued to increase by 166 points last year. Under the excellent asset quality, the provision released profits, and the year-on-year growth rate of net profit continued to maintain an upward trend, with a year-on-year increase of 24.1%, the best growth rate in recent ten years. 2. The rise of both volume and price drives Q4 net interest income + 11.7% month on month. Among them, the quarterly annualized interest margin rises by 15bp month on month, with the joint contribution of both capital and negative sides. The upward income on the asset side is expected to be driven by structure and interest rate, and the downward income on the liability side is expected to be driven by structure. 3. Retail credit was well extended in a single quarter, and demand deposits increased sharply, driving the continuous optimization of asset liability structure. In the fourth quarter, Industrial Bank Co.Ltd(601166) credit remained in good supply, adding 114.8 billion yuan in a single quarter, accounting for nearly 25% of the annual increase. Q4 new credit was mainly driven by retail, which accounted for 60% in a single quarter, driving the proportion of existing personal loans to 22% of total assets month on month. The growth rate of deposits on the liability side rebounded, especially the high growth of demand deposits, with an increase of 100 billion in Q4 single quarter deposits. 4. The asset quality is excellent and solid: the non-performing assets are down, and the provision is solid. Asset quality continues to show an improvement trend, which is the best level since 2014. The net generation of accumulated non-performing assets is at a low level of 0.8%, which reflects that there is little new pressure on the company’s asset quality to a certain extent. The safety margin is high and the future risk is controllable. From the perspective of subdividing non-performing, the non-performing of all public industries continued to decline to a historical low. Although the non-performing rate of retail credit card increased slightly, the comprehensive non-performing rate of retail was reduced through structural optimization. 5. Capital was endogenous, and the core tier 1 capital adequacy ratio increased month on month
Insufficient financial report: the year-on-year growth of intermediate business income has slowed to 13% compared with the growth rate of 26% in the first three quarters, but the income related to wealth management continues to maintain a good growth, the consignment income continues to increase by 45% year-on-year under the high base, and the consulting fee brought by investment banking has increased by 10% year-on-year, which is still the main composition of Industrial Bank Co.Ltd(601166) handling fee income. The annual net non interest income increased by 26.2% year-on-year, driven by the investment income in net other non interest income, and the investment income in Q4 was 12.7 billion in a single quarter.
Investment suggestion: Industrial Bank Co.Ltd(601166) profit keeps high growth, asset quality is good and solid, and the incremental risk in the future is small. Company 2022e, 2023epb0 62X/0.55X； PE4. 35x / 3.83x (pb0.57x/0.52x; pe4.96x / 4.47x in the stock bank), Industrial Bank Co.Ltd(601166) current valuation is not high, the company’s fundamentals are stable, the asset side has strong asset acquisition ability, and the deposit foundation on the liability side is 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 management team of the company is excellent with a high degree of marketization. It is recommended to keep track of key points.
Note: according to the detailed data of the annual report of 2021, we adjusted the assumptions of key data such as scale growth, asset negative rate of return and credit cost, resulting in the adjustment of the profit forecast from 2022 to 2024 compared with the previous period.
Risk tip: the macro economy is facing downward pressure, and the operating performance is lower than expected.
