DB 德银行：工行 深度报告 06.15 29页

Industrial Bank - A differentiated growth strategy

15 June 2007 29页

　　　　　　　　　　　　　　　　Table of Contents
Valuation ............................................................................................ 5
Target price RMB$35.11, implying 4.4x 1H08 PBV...................................................................5
A game of localised monopoly ......................................................... 6
Fujian Province – the missing pearl...........................................................................................6
Home market is still the growth driver......................................................................................7
How INDB benefits from a localised monopoly........................................................................7
Innovative business model and financial management................. 9
Superior return on equity ..........................................................................................................9
Generating tax-free and credit-risk-free income ......................................................................10
Achieving high cost efficiency without economy of scale ......................................................11
Pioneered product: bank-to-bank platform..............................................................................13
Financial forecast............................................................................. 15
Net interest income ................................................................................................................15
Non-interest income ...............................................................................................................17
Operating expense..................................................................................................................18
Asset quality ...........................................................................................................................18
Risk factors....................................................................................... 20
More tightening measures to squeeze banks’ margin ............................................................20
LDR may constrain loan growth..............................................................................................20
Surging property-related lending.............................................................................................20
Change in business model......................................................................................................20
Company background..................................................................... 21
Brief history............................................................................................................................21
Shareholding structure............................................................................................................21
Management profile and board members ..............................................................................22