\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 166 Industrial Bank Co.Ltd(601166) )
Event: Industrial Bank Co.Ltd(601166) released the annual report of 2021. The annual revenue growth rate was 8.91%, the profit growth rate before provision was 6.74%, and the growth rate of net profit attributable to the parent company was 24.1%. Our comments are as follows:
Industrial Bank Co.Ltd(601166) the performance growth in the fourth quarter of last year mainly depended on the expansion of scale, the growth of non interest income, the significant reduction of year-on-year pressure on provision provision and the reduction of tax revenue; The year-on-year decline in net interest margin and the increase in cost expenditure have made a negative contribution to performance growth.
\u3000\u30001. The growth rate of net interest income in the fourth quarter of last year was 3.45%, up 12.66pc from 2021q3, mainly because the year-on-year decline in net interest margin began to narrow. From the asset side, Industrial Bank Co.Ltd(601166) increased credit in the fourth quarter of last year, and the proportion of loans in total assets increased by 0.7pc to 50.1% compared with 21q3. From the perspective of the internal structure of credit, it is mainly high-yield retail credit. It is expected that Industrial Bank Co.Ltd(601166) appropriately increase the credit line of housing mortgage under the background of policies encouraging banks to meet the demand for reasonable house purchase. From the liability side, the proportion of deposits in total liabilities has increased slightly, especially the low-cost demand deposits. It is expected to benefit from the accelerated issuance of local bonds and the increase of precipitated demand funds.
Through the adjustment of asset liability structure, it is estimated that the Industrial Bank Co.Ltd(601166) net interest margin in the fourth quarter of last year improved slightly month on month, and the year-on-year decline was narrower than that in 21q3, driving the growth rate of net interest income to rise.
\u3000\u30002. In the fourth quarter of last year, the growth rate of non interest net income was 33.06%, 18.2pc lower than that of 21q3. Among them, the growth rate of net income from handling fees and commissions in 21q4 was – 19.06%, which was 50pc lower than that in 21q3, becoming the main factor hindering the growth of non interest income. It is expected that the growth rate of trust handling fees will decline due to the pressure drop on trust products last year; At the same time, the epidemic continued to repeat, and the volume of credit card transactions fell in the fourth quarter of last year, driving the growth rate of relevant income to decline.
Under the influence of the low base effect in 2020, the growth rate of other non interest net income increased significantly in the fourth quarter of 2021, supporting non interest income.
\u3000\u30003. In the fourth quarter of last year, the cost income ratio was 34.1%, up 4.56pc year-on-year, which was a drag on the growth of profit before provision. On the one hand, the increase in cost expenditure is due to the increase in operating expenses in key areas such as financial technology, brand and customer infrastructure; On the other hand, increase the recruitment of personnel and increase the incentive for employees, and the salary of employees has increased.
\u3000\u30004. The asset quality was stable and the credit cost was down Industrial Bank Co.Ltd(601166) in the annual report, the risks of real estate and local government financing platforms were disclosed in detail for the first time. ① at the end of 2021, the non-performing rate of Societe Generale to public real estate was 1.08%, an increase of 42bp compared with the end of June last year. On the one hand, Societe Generale reduced the balance of non-performing loans to public real estate; on the other hand, the balance of non-performing loans to public real estate increased by 1.23 billion yuan. Considering that the provision coverage for public real estate reached 305%, it has a strong ability to offset risk losses.
② at the end of last year, the balance of non-performing loans of local government financing platforms was 6.062 billion yuan, with a non-performing rate of 1.97%. Because the debt balance of local financing platforms accounted for only 4.73% of the total loans, it was not high, and ultimately had a relatively small impact on the quality of assets.
③ at the end of last year, the Industrial Bank Co.Ltd(601166) non-performing rate was 1.1%, down 2 bp from 2021q3, in which the asset quality of corporate loans continued to improve, while the standard for overdue recognition of credit card loans was stricter, resulting in a slight increase in the indicators such as attention rate, overdue rate and non-performing rate. It is expected to be a short-term influencing factor and will not have a great impact on the quality of Industrial Bank Co.Ltd(601166) assets.
④ under the background of relatively stable asset quality, Industrial Bank Co.Ltd(601166) the credit cost decreased year-on-year in the fourth quarter of last year, driving the growth rate of net profit to maintain an excellent level.
Investment suggestion: Buy-A investment rating, 6-month target price of 28.58 yuan. We expect the company’s revenue growth rate to be 8.73% and net profit growth rate to be 14.81% in 2022. We give the investment rating of Buy-A, and the six-month target price is 28.58 yuan, equivalent to 1.0xpb in 2021.
Risk tip: the process of economic recovery is blocked; Macro policies were tightened by a large margin.
