\u3000\u3000 Industrial Bank Co.Ltd(601166) (601166)
Event: on January 10, Industrial Bank Co.Ltd(601166) released the performance express for 2021, with revenue of 221.24 billion, yoy + 8.91% (- 3.1 PCT); Net profit attributable to parent company: 82.68 billion, yoy + 24.1% (+ 22.9pct); Roe was 13.94% (+ 132bp); The defect rate is 1.1% (- 15bp); The provision coverage rate is 268.73% (+ 49.9pct).
Benefiting from the low base effect and the steady growth of revenue, the net profit attributable to the parent company achieved rapid growth in 21 years, and the marginal growth rate continued to rise, driving the restart of growth after the decline of roe for six consecutive years.
The non-performing rate hit a new low since 2015, and the asset quality was further optimized. The decline of non-performing rate combined with the increase of loan allocation ratio has significantly increased the provision coverage in 21 years, effectively improved the safety margin, and reserved space for the release of future profits.
The growth rate of loans throughout the year continued to be higher than that of total assets. Under the background of the relative weakness of social finance throughout the year, it reflects the strong ability of credit supply. The optimization of asset structure is expected to play a positive role in improving the net interest margin.
Investment suggestion: the profit growth rate exceeded expectations, led to the stabilization and recovery of roe, maintained excellent asset quality and continued to improve, improved asset structure and favorable net interest margin. It is estimated that the EPS in 22 / 23 years will be 4.67 yuan and 5.58 yuan respectively. The closing price on January 14, 2022 corresponds to 0.7 times of 21-year Pb, which is covered for the first time and given a "recommended" rating.
Risk tip: economic stabilization fails to meet expectations; The bad classification policy is becoming stricter; Interbank business risk
