Industrial Bank (601166): Revenue Exceeds Expectations, Improves Sustainability

This report reads: 18A and 19Q1 performance slightly exceeded market expectations.

The widening interest spread and the increase in investment income have driven revenue growth, and the liquidity regulatory indicators have reached the standard.

Raise target price to 26.

18 yuan, 35% of the current price space, maintaining the level of overweight.

Investment points: Investment advice: Considering the widening of the Industrial Bank ‘s interest margin, the sustainability and liquidity supervision indicators have reached the standard, 四川耍耍网and raised the forecast for net profit growth in 19/20/21 to 12.

70% / 10.

35% / 11.

89%, corresponding to EPS3.

22 (-0.

11, due to the difference between the predicted value and the disclosed value of the 18 annual report) / 3.

56 (-0.

07) / 3.

99 yuan, BVPS23.

80/26.

59/29.

31 yuan, the current price corresponds to 6.

04/5.

46/4.

87 times PE, 0.

82/0.

73/0.

66 times PB.

Raise target price to 26.

18 yuan, 35% of the current price space, corresponding to 1 in 19 years.

1 PB, holding level.

Performance Overview: 18A / 19Q1 revenue +13.

1% / 34.

8%, net profit +6.

0% / 11.

3%, net interest margin (beginning and end of period) 1.

48% / 1.

49%, non-performing rate 1.

57% / 1.

57%, provision coverage ratio of 207% / 206%.

New understanding: widening interest spreads are expected to be sustainable, and liquidity indicators have reached standards and revenue has increased significantly.

18Q4 / 19Q1 single quarter revenue growth rate was 18.

2% / 34.

8%, the driving force behind the increase in growth rate is the widening of interest margin and investment income growth.After reducing the impact of I9, the net interest margin of 19Q1 was 18A + 11bp. The wider interest margin was attributed to: ① the optimization of the resistance structure, and 19Q1 deposition accounted for +3 of the initial period of comparison.

5 pieces to 56.

5%, and successfully issued 60 billion green financial bonds; ② market interest rates fell, Industrial Bank was the most beneficial.

The increase in investment income was attributed to the bull market in the first quarter and lock-in gains.

Regulatory compliance is worry-free.

At the end of 18 years, the proportion of net stable funds was 101%, and the liquidity coverage ratio was 142%, all meeting regulatory requirements.

In 19 years, it will issue perpetual bonds and extend the duration of deposits to improve liquidity indicators.

Bad indicators are stable.

The 19Q1 NPL ratio and provision ratio were flat at the end of 18 years, and the attention rate was + 7西安耍耍网 bp to 2 from the previous quarter.

12%.

In 19 years, it will operate poorly by reducing transfers and increasing write-offs.

Risk Warning: Changes in economic growth lead to increased credit risk.