\u3000\u3000 Industrial Bank Co.Ltd(601166) (601166)
Take the lead in disclosing the performance express, and the performance is expected to be happy
On January 10, the company released the first performance express of listed banks in 2021: the annual net profit attributable to the parent company was + 24.10% (year-on-year in the first three quarters + 23.45%), and the operating revenue was + 8.91% (year-on-year in the first three quarters + 8.08%). Annual weighted roe13 94% (14.73% in the first three quarters), year-on-year + 1.32pct.
The performance growth rate reached a new high, and the two-year compound growth rate reached a double-digit level
The year-on-year growth rate of net profit attributable to parent company in 2021 reached a new high in recent 8 years. In the past two years, the average annual compound growth rates of operating revenue and net profit attributable to parent company were 10.46% and 12.04% respectively, showing a double-digit level, indicating that despite the epidemic disturbance, the company still has strong performance release ability while consolidating asset quality. The year-on-year growth rate of net profit attributable to the parent company in Q4 in a single quarter increased by 2.31pct to 26.38% compared with Q3. We judge that this is mainly due to the year-on-year growth of medium income under the low base effect of 2020q4.
The net interest margin is expected to be stable and the asset structure is expected to be optimized
According to our calculation, the annual net interest margin in 2021 is basically stable compared with the first three quarters. Looking forward to the future, with the improvement of the epidemic situation, the company is expected to continue to increase the investment of retail loans and optimize the asset structure. On the liability side, Industrial Bank Co.Ltd(601166) active liabilities account for a relatively high proportion. Under the environment of wide credit and wide currency, it is expected to benefit more, so as to alleviate the downward pressure on the interest margin.
The non-performing rate decreased to 1.10%, and the provision coverage continued to increase
At the end of Q4, the non-performing rate of the company decreased 2bp to 1.10% month on month, the lowest level in recent seven years and the low level of listed banks. The company has significant asset quality advantages and successfully withstood the impact of the epidemic. The provision coverage ratio at the end of Q4 increased by 5.67pct to 268.73% month on month, the highest level in recent seven years, and the ability to resist risks and the space to feed profits were further improved.
Abundant capital, strategic development can be expected
Although it was included in the first list of China's systemically important banks and faced the regulatory requirement of 8.25% of the core tier 1 capital adequacy ratio, the company still had about 1.29 pct of regulatory buffer at the end of 2021q3. In addition, the company successfully issued 50 billion yuan of convertible bonds in 2021q4, which not only laid an advance for further replenishing capital ammunition, but also reserved sufficient space for subsequent scale expansion and accelerating strategic transformation. Therefore, we believe that the year-on-year growth rate of total assets and total liabilities at the end of 2021q4 decreased by 2.56pct and 2.32pct to 8.96% and 8.77% respectively compared with the first three quarters, which is only a phased phenomenon. In the long run, good asset quality and abundant capital have laid a solid foundation for the company's strategic transformation and steady development.
Investment suggestion: deepen the implementation of the "1234" strategy and continuously empower three business cards
The company has solid fundamentals, actively implemented the "1234" strategy, prospectively explored market opportunities, and continuously enabled the three golden business cards of "green bank, wealth bank and investment bank". With excellent asset quality and sufficient capital, it is expected to seize the opportunity of green finance development and realize differentiated development. We expect that the growth rate of the company's performance from 2022 to 2023 will be 15.5% / 16.1% respectively. With reference to its 1.48 times consensus forecast Pb valuation of the standard bank China Merchants Bank Co.Ltd(600036) 2022, it was given a target valuation of 1 times Pb, with a target price of 32.26 yuan / share, maintaining the "buy" rating.
Risk warning: repeated epidemic situation; The economic downturn exceeded expectations; The progress of convertible bond to equity swap is less than expected; The express report is the group caliber data for preliminary accounting, and the annual report shall prevail
