\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 166 Industrial Bank Co.Ltd(601166) )
Key investment points
Highlights of the quarterly report: 1. The growth of revenue was stable, and the net profit increased by 15.6% year-on-year. The medium income growth is bright, driving the revenue growth to remain relatively stable; Investment in technology and customer infrastructure related construction costs increased, and the growth rate of profit before provision decreased to a certain extent; The provision provision remained relatively stable, and the net profit increased by 15.6% year-on-year. 2. The year-on-year growth rate of medium income was not weak, widened to 19%, and the proportion of revenue further increased to 22.5%. It is expected that the fee income related to investment banking will maintain a strong growth. 3. Asset quality remained stable and excellent. The non-performing rate remained stable at a low level since 2014, and the net generation of non-performing assets decreased. The proportion of concerned loans decreased 2bp to 1.50% month on month. The provision coverage rate was high, unchanged at 269% month on month, and the provision loan ratio was 2.95%.
Insufficient quarterly reports: 1. Interest margin dragged down Q1 net interest income by – 3.0% month on month. The single quarter annualized interest rate spread decreased by 9bp month on month, which was mainly dragged down by the 14bp decline in asset side yield and the 6BP positive contribution of liability side cost to interest rate spread. On the one hand, the downward trend of yield is expected to be affected by repricing ( Industrial Bank Co.Ltd(601166) q1 repricing loans account for 65%), and at the same time, the proportion of corporate loans to total loans has increased to a certain extent.
Investment suggestion: Industrial Bank Co.Ltd(601166) profit increased steadily and asset quality was stable. Company 2022e, 2023epb0 65X/0.58X； PE4. 60x / 4.03x (pb0.56x/0.51x; pe4.49x / 4.43x in 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 also 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 Industrial Bank Co.Ltd(601166) 1 quarterly report, we fine tuned the assumptions of credit growth and credit cost. The revenue of 2022e / 2023e was adjusted to 251.07/282.71 billion (the previous value was 253.57/286.22 billion), and the net profit of 2022e / 2023e was adjusted to 95.15/108.51 billion (the previous value was 94.74/107.66 billion).
Risk tip: the macro economy is facing downward pressure, and the operating performance is lower than expected.
