INDUSTRIAL BANK(601166):3Q23 EARNINGS DECLINED
INDUSTRIAL BANK(601166):3Q23 EARNINGS DECLINED
Industrial Bank's (IB) attributable net profit decreased 17.2% YoY in 3Q23, which is lower than our expectation, against 4.9% YoY decline in 1H23. As a result, IB's attributable net profit dropped 9.5% YoY in 9M23, mainly due to negative growth in operating income and decline in NIM. Its net interest income increased slightly in 9M23, against 0.8% YoY decrease in 1H23, mainly due to weak growth in interest-earning assets and decrease in NIM. As of end-September 2023, its loans/deposits increased 6.6%/10.1% from end-2022. We noted that its net fee and commission income dropped 30.4% YoY in 9M23 amid weak investment sentiments and low investment appetites among its clients. Its asset quality remained solid as NPL ratio dropped slightly in 9M23. Valuation is undemanding. Maintain BUY rating
興業銀行（IB）的應占淨利潤在23年第三季度同比下降17.2％，低於我們的預期，而23年上半年同比下降4.9％。因此，興業銀行的應占淨利潤在9M23年同比下降9.5％，這主要是由於營業收入的負增長和NIM的下降。其淨利息收入在9M23中略有增長，而23年上半年同比下降0.8％，這主要是由於利息資產增長疲軟和NIM減少。截至2023年9月底，其貸款/存款比2022年底增加了6.6％/10.1％。我們注意到，由於投資情緒疲軟，客戶投資意願低迷，其淨費用和佣金收入在9M23年同比下降30.4％。由於不良貸款比率在9M23中略有下降，其資產質量保持穩定。估值要求不高。維持買入評級
Key Factors for Rating
評級的關鍵因素
Asset quality remained solid in 9M23. We noted that its NPL ratio reached 1.07% at end-September 2023, against 1.08% at end-June 2023 and 1.09% at end-December 2022. Meanwhile, its allowance to NPLs reached 237.8% at end-September 2023, against 245.77% at end-June 2023 and 236.4% at end- December 2022. We expect its NPL ratio to stay at 1.07% in 4Q23.
資產質量在9M23中保持穩定。我們注意到，其不良貸款比率在2023年9月底達到1.07％，而2023年6月底爲1.08％，2022年12月底爲1.09％。同時，其不良貸款補貼在2023年9月底達到237.8％，而2023年6月底爲245.77％，2022年12月底爲236.4％。我們預計其不良貸款比率將在23年第四季度保持在1.07％。
Net interest income increased slightly in 9M23. Its net interest income increased 1.1% YoY in 9M23, as bank strengthened its financial support to the real economy and NIM further declined. We noted its NIM dropped 16bps in 9M23 after declining 19bps in 2022.
2023年9月淨利息收入略有增加。由於銀行加強了對實體經濟的財務支持，NIM進一步下滑，其淨利息收入在9M23年同比增長1.1％。我們注意到，其淨資產淨值在2022年下降19個點子之後，在9M23中下降了16個點子。
Net fee and commission income decreased in 9M23. Its net fee and commission income decreased 30.4% YoY in 9M23, which is lower than growths of its peers, mainly due to the sharp drop in wealth management business income. As a result, the proportion of net fee and commission income in total operating income may reach 14.1% in 9M23, against 19.2% in 9M22.
2023年9M的淨費用和佣金收入有所下降。其淨費用和佣金收入在9M23年同比下降30.4％，低於同行的增長，這主要是由於財富管理業務收入的急劇下降。因此，在9M23，淨費用和佣金收入佔總營業收入的比例可能達到14.1％，而2022年9M2的比例可能達到19.2％。
Key Risks to Rating
評級的主要風險
The bank might be under strong pressure to provide more support to the real economy if China's economy slows down significantly
如果中國經濟大幅放緩，該行可能會面臨向實體經濟提供更多支持的巨大壓力
Valuation
估價
Valuation is undemanding. IB is undervalued as the bank is now trading at 0.44x 2023E P/B. We believe that the bank will further strengthened its financial support to the manufacturing sector in the future. We expect its ROAE to reach 12.2% in 2023. We revised down our target price from RMB23.78 to RMB21.96, based on about 0.65x 2023E P/B.
估值要求不高。興業銀行被低估，因爲該銀行目前的市盈率爲2023年東部市盈率的0.44倍。我們相信該銀行未來將進一步加強對製造業的財務支持。我們預計其投資回報率將在2023年達到12.2％。根據2023年東部市盈率約0.65倍，我們將目標價從23.78元人民幣下調至21.96元人民幣。
譯文內容由第三人軟體翻譯。