Over the past year, Industrial Bank has continued to optimize its capital supply structure, with balance of medium and long-term loans to the science and innovation enterprises and manufacturing industry, and loans to strategic emerging industries and green loans growing by an average of more than 30% compared with the end of the previous year.
The “new changes” in asset and liability structure reflect the “great endeavors” of Industrial Bank in anchoring on high-quality development and accelerating the cultivation of new quality productivity. As a systemically important bank in the domestic landscape, Industrial Bank has earnestly implemented the spirit of the Central Financial Work Conference, followed the political and people-oriented nature of financial work in an in-depth way, closely focused on the construction of a modernized industrial system led by scientific and technological innovation, and practiced “Five Major Areas”. By doing so, it has successfully promoted the development of new-quality productive forces with high-quality financial services, and contributed to the construction of the Chinese modernization with its efforts.
Focusing on Techfin
Grasping the Key Link of Innovation
“In 2018, we plan to acquire Nexperia to fill the gap of China’s automotive semiconductors in the IDM field.” the relevant person in charge of Wingtech recalled, “It was during the Spring Festival, yet the staff of Industrial Bank sacrificed their precious vacation breaks and quickly set up a working group to carry out due diligence. The Industrial Bank was not the first bank we approached, but it was the earliest to come up with the feasibility plan.” With the professional and efficient financial support of Industrial Bank, Wingtech realized the largest semiconductor merger and acquisition in the history of China's industry, and became the only IDM enterprise in China.
Semiconductor is a key area for China to promote scientific and technological self-reliance and self-improvement, and to overcome the “bottleneck” problem. In 2023, Industrial Bank invested more than RMB 58 billion in loans to the semiconductor industry, supporting key enterprises such as SMEE, CanSemi, Shenyang KingSemi, SiEn Semiconductor, ChangXin Memory Technologies, Nexchip, and Winskysemi, etc. to traverse the phase fluctuation cycle and accelerate the realization of domestic independent innovation substitution.
Science and technology innovation can give rise to new industries, new modes and new growth drivers, and is the core element for the development of new productivity. In recent years, Industrial Bank has centered on the national industrial layout and regional science and innovation resource endowment, actively constructed a Techfin service system compatible with scientific and technological innovation, focused on Techfin, and promoted the benign circle of “science and technology-industry-finance”.
Synthetic biology industry is one of the eight future industries in Shenzhen. Founded in 2017, Readline was the first to apply biosynthesis technology to “life molecules” with amino acids, sugars, and nucleotides as monomers in China and successfully commercialized their production. Because of industry’s long research and development cycle, large investment, and the technical sophistication and cutting-edge nature of the field, banks often find it challenging to understand and are hesitant to lend.
Upon recognizing Readline's financing needs, Industrial Bank leveraged its research advantages, collaborated with chief analyst team of its subsidiary Industrial Bank Research Biomedical to carry out in-depth research, so as to have a better understanding of the enterprise’s situation. On the other hand, the Bank has also utilized the “technological flow” credit evaluation system for the drawing of enterprise “profile” and examined in-depth the enterprise’s quantity and quality of intellectual property rights, its density of invention patents, the strength of its scientific research team, its scientific and technological qualifications, innovation achievements and awards, and other scientific and technological innovation soft power, so as to let the “technological flow” turn into the “capital flow”. Finally, the Bank granted the Readline a credit line of RMB 26 million to support its growth and strengthening.
Relying on the “technology flow” credit evaluation system, Industrial Bank has been running at an “accelerated pace” in serving scientific and technological innovation. By the end of 2023, more than RMB 2 trillion of financing demand has been approved through the “technology flow”, with nearly RMB 600 billion already allocated across various financing types.
In terms of product service system, Industrial Bank focuses on the complex and diversified investment and financing needs of science and innovation enterprises, and builds a product service system covering the whole life cycle of science and innovation enterprises, including debt financing, equity financing, capital market, wealth management and personal finance. By the end of 2023, the Bank’s balance of science and innovation financial loans exceeded RMB 450 billion, an increase of 32% from the end of the previous year.
To serve scientific and technological innovation, it is necessary to cultivate fertile soil for Techfin and create a “rainforest”-type financial ecology. Industrial Bank actively uses the Group’s multi-license resources internally and establishes a strategic cooperation eco-alliance with nearly 100 venture capital institutions externally. With the help of PE/VC investment institutions in the alliance, it broadens the financing channels for science and innovation enterprises through the “debt-equity combination” products which mainly receive investments from the external investment institutions and get loans from the Bank.
Promoting Industrial Upgrading via “Commercial Bank + Investment Bank” Strategy
Constructing New Competitive Advantages
Walking into the 5G Intelligent Industrial Park in Dongping Town, Yongchun County, Quanzhou, it can be found that industrial robots with different functions are grouting, glazing, loading and unloading, and handling in accordance with established procedures.
In recent years, Techramic has followed the pace of industrial digital transformation, taken industrial robots as an important starting point of intelligent manufacturing, and continued to increase research and development investment, carrying out 5G intelligent transformation of bathroom ceramics in forming, drying, firing, packaging and other links. These efforts not only improve production efficiency, but also are more friendly to the environment.
In order to support the technological innovation of enterprises, Quanzhou City, Fujian Province has set up a “technological innovation fund” with a total scale of RMB 15 billion, and Techramic has become one of the “white list” enterprises of the fund. Industrial Bank Quanzhou Branch quickly docked with the enterprise. In January this year, the Branch has landed “technological innovation fund” loans of nearly RMB 15 million, adding new impetus for the transformation and upgrading of the enterprise.
To develop new quality productive forces, it is needed to accelerate new industrialization, and cultivate and expand advanced manufacturing clusters. Industrial Bank has always adhered to the focus of financial services on the real economy, continued to increase and optimized financial supply, thus enabling the transformation and upgrading of the manufacturing industry with high-quality financial services, and promoting the construction of a manufacturing power. By the end of 2023, Industrial Bank’s balance loans in manufacturing industry reached to nearly RMB 830 billion, balance loans of medium and long-term loans in the manufacturing industry exceeded RMB 390 billion and loans to strategic emerging industries exceeded RMB 360 billion, with an increase of 20%, 37% and 29% respectively compared with the end of previous year.
From China’s leading construction machinery enterprises to national intelligent manufacturing benchmark enterprises, XCMG Group’s intelligent transformation and upgrading cannot be separated from financial support. Since the establishment of business cooperation with XCMG Group in 2010, over the years, Industrial Bank has provided a package of financial services such as loans, bonds, supply chain finance, capital pools, and leasing and exerted the advantage of “commercial bank + investment bank” strategy to meet XCMG Group’s diversified financing needs during its transformation and upgrading. Up to now, Industrial Bank has provided XCMG Group with financing balance of totally RMB 13.6 billion, and underwritten the issuance of bonds RMB 6.5 billion. Through the “integration of investment and underwriting”, the Bank has helped the enterprise to effectively broaden financing channels and reduce financing costs.
The park is the main position for industrial transformation and upgrading, and also the main field for new productivity of financial services. In Huzhou, Zhejiang Province, Industrial Bank has provided diversified financing support for the construction, development and transformation and upgrading of the park since the beginning of its cooperation with Changxing Economic Development Zone in 2015. It has helped the Changxing Economic Development Zone in optimizing its industrial structure, building a landmark industrial chain of smart cars and key components, and embarking on a high-quality development path of industrial transformation and upgrading.
Changxing Economic Development Zone is just a microcosm of Industrial Bank’s layout of the new track of park finance for promoting the transformation and upgrading of the manufacturing industry. At present, Industrial Bank focuses on all kinds of park entities and industrial clusters, provides comprehensive and diversified financial services, and helps the transformation and upgrading of traditional manufacturing industry and the development of advanced manufacturing industry clusters. It has served nearly 400,000 parks and park customers, and the scale of the park’s financial assets exceeded RMB 2 trillion.
Cultivating Green Financial Advantages
Drawing a New Picture of Green Economy
In recent years, new energy vehicles, lithium-ion batteries, and photovoltaic products have become the new business cards of “Made in China”, and served as the new driver for the cultivation and development of the new productive forces.
As one of the four largest PV module companies, JinkoSolar sold more than 75GW of PV modules in 2023, making it become the global module shipment champion. JinkoSolar has been engaged in the clean energy industry. With huge scale of production and sales, high investment in technology research and development and the challenges of globalization, it has a high demand for capital and supporting financial services. Industrial Bank has given full play to the advantages of its green finance group to help JinkoSolar obtain a RMB 690 million green debt financing plan and help JinkoSolar list on the Science and Technology Innovation Board in 2021. Meanwhile, it has proactively extended its financial services to a wide range of areas such as transactional banking, international business, and financial leasing, to satisfy the customer’s diversified needs.
According to information, in recent years, Industrial Bank has accelerated the layout of the “Five New Tracks” including energy finance and automotive finance, focusing on new energy vehicles, photovoltaic, wind power, energy storage and other new energy industries, and increasing credit investment. By the end of 2023, its balance of green loans in the clean energy industry amounted to RMB 174.2 billion, an increase of more than 30% compared with the previous year.
Green is the background color of high-quality development, and new quality productivity is green productivity. As a leader in green finance, Industrial Bank has centered on serving the dual-carbon strategy, done a good job of effectively linking green finance and transformation finance, and coordinated support for the green transformation and upgrading of traditional industries and the development and growth of green emerging industries, thus accelerating the formation of green productivity.
In Changchun, a major industrial city in Northern China, a local iron and steel enterprise has built a series of green upgrading projects such as waste-heat-driven power generation, flue gas desulfurization, dust removal, etc., and is faced with increasing financial pressure. To help the enterprise construct the waste-heat-driven power generation project, Industrial Ban timely customized a comprehensive financing plan for green finance, and provided green loans of RMB 220 million for the enterprise. After the project is put into use, it is expected to reduce 1 million tons of industrial carbon dioxide per year, and help the enterprise in green transformation and development. Data shows that by the end of 2023, Industrial Bank has provided a total of RMB 132.1 billion in financing for low-carbon transformation in high carbon industries represented by petrochemicals and steel industries.
Accelerating the green transformation of the development mode is inseparable from the establishment of a sound green financial system. In recent years, Industrial Bank has continued to deepen the supply side structural reform of green finance, made coordinated efforts to cut carbon emissions, reduce pollution, expand green development, and pursue economic growth, and continued to brighten the brand of “green banking”. By doing so, it has formed an all-round and diversified green financial service system, covering green credit, green bonds, green trust, green leasing, green funds and green wealth management. By the end of 2023, the green loan balance for Group amounted to RMB 1.89 trillion, an increase of 16% compared with the end of the previous year. Of which, the balance of green loans amounted to RMB 809 billion, an increase of 27% compared with the end of the previous year. Its MSCI ESG rating has been upgraded from A to AA, making the Bank become the only one to have received the highest rating in the domestic banking sector for five consecutive years.
From financing to intelligence integration, Industrial Bank has taken the lead in setting up the Carbon Finance Research Institute, focusing on research on green finance, climate change and environmental economics, and low-carbon transformation of energy and industry, and has become an important “think tank” in the field of green finance. At the same time, focusing on the transformation of research results on the ground, it has formulated a comprehensive service program and set up a special working group around the construction of the National Green Finance Pilot Zone, climate investment and financing and other pilot projects, signed strategic cooperation agreements with six pilot provinces and regions, provided financing services and professional support, and invested a cumulative total of RMB 907.3 billion in green financing.
Time waits for no man, but those who work harder first. Industrial Bank will firmly grasp the principle of high-quality development in the new era, promote scientific and technological innovation via financial innovation, and advance its own high-quality development in the service of the development of new quality productivity, striving to write a brilliant chapter in the road of financial development with Chinese characteristics!