\u3000\u3000 Industrial Bank Co.Ltd(601166) (601166)
\u3000\u30001. Event: Industrial Bank Co.Ltd(601166) released the performance express for 2021. In 2021, the growth rate of revenue was 8.91%, and the growth rate of net profit attributable to parent company was 24.10%. The performance was better than expected. Our comments are as follows:
\u3000\u30002. Revenue growth stabilized and rebounded, and the main driving factor is expected to be the improvement of net interest margin. In the first three quarters of 2021, Industrial Bank Co.Ltd(601166) revenue growth showed a downward trend quarter by quarter, mainly because the net interest margin decreased month on month and the year-on-year decline expanded. In the fourth quarter of last year, we expect the net interest margin to rise slightly month on month. On the one hand, Industrial Bank Co.Ltd(601166) increased the supply of high-yield retail credit in the fourth quarter of 2021, increased the proportion of credit cards and other loans, and stabilized the asset side yield; On the other hand, under the influence of the central bank's RRR reduction and deposit repricing, the debt cost decreased steadily. Positive changes occurred at both the asset side and the liability side, driving the improvement of Q4 net interest margin. This also led to Industrial Bank Co.Ltd(601166) revenue growth, which performed beautifully in the fourth quarter of last year.
\u3000\u30003. Asset quality continues to improve. By the end of the fourth quarter of 2021, Industrial Bank Co.Ltd(601166) non-performing rate was 1.1%, down 2bp month on month; The provision coverage rate was 268.73%, up 5.7pc month on month, further enhancing the ability to resist risks.
From 2016 to 2020, Industrial Bank Co.Ltd(601166) is also accelerating the clearing of stock risk in the process of business structure adjustment. At present, the pressure of credit risk is very small. As for the exposure of real estate risks that the market is very concerned about, we believe that the possibility of significant fluctuations in the real estate market price in the future is low, and the risk pressure faced by bank real estate related loans will be much better than the pessimistic expectation of the market.
\u3000\u30004. Under the high base effect, the growth rate of net profit in 2021q4 further increased. Under the background of light pressure on asset quality, Industrial Bank Co.Ltd(601166) the credit impairment loss accrued in the fourth quarter of 2021 decreased by 10.58% year-on-year, and the credit cost tended to decline, driving the improvement of net profit growth, which was better than the market expectation.
\u3000\u30005. Roe rebounded significantly. The Industrial Bank Co.Ltd(601166) roe in 2021 was 13.94%, close to the level in 2019, an increase of 1.32 percentage points over 2020, mainly due to the clearing of risks and the accelerated release of profits. Looking forward to 2022, we expect that the roe may maintain a steady upward trend.
Investment suggestion: Buy-A investment rating, 6-month target price of 28.58 yuan. We expect the company's revenue growth rate to be 10.93% and net profit growth rate to be 15.34% in 2022. We give the investment rating of Buy-A, and the six-month target price is 28.58 yuan, equivalent to 0.98x Pb in 2021.
Risk tip: the process of economic recovery is blocked; The steady growth policy was not as strong as expected.
