\u3000\u3000 Industrial Bank Co.Ltd(601166) (601166)
Summary of express: 1. Net profit increased by 24% year-on-year. 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 parent achieved a high year-on-year growth of 24%. From the growth rate of single quarter revenue and single quarter net profit, the year-on-year growth rate of Q4 is also wider than that of the third quarter. 2. In the fourth quarter, the growth rate of deposits and loans remained not weak, and the marginal structure was optimized. 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. Deposit 4q increased by 2.4% month on month, accounting for 54.5% of total liabilities month on month. 3. Asset quality continues to improve month on month at an excellent level, and the pressure on asset quality is limited 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 company's recognition of non-performing assets has been relatively strict. Through several years of risk resolution, various credit risk indicators are at their own historical and better level in the same industry. At the same time, the risks of financial management business and inter-bank business are controllable, the real estate customers are scattered and the quality is good, and the incremental risk of overall asset quality in the future is relatively small.
Investment suggestions: 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. With the approval of convertible bonds, the company can expect rapid growth in the future. Company 2021e, 2022epb0 71X/0.63X； PE5. 18x / 4.37x (pb0.68x/0.61x; pe5.86x / 5.28x of the joint-stock bank), the company's fundamentals are stable, the asset side has strong asset acquisition ability, and the deposit foundation at 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 banks + investment banks", 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 options for 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, and the operating performance is lower than expected.
