AIC扩张重启：其影响是什么？

AIC Expansion Resumes: WhatAre the Implications? Banks OVERWEIGHT Huatai Research 18 May 2025│China (Mainland) (Maintain) Themes AnalystSHEN JuanSAC No. S0570514040002SFC No. BPN843shenjuan@htsc.com+(86) 755 2395 2763 AIC expansion resumes: what are the implications?On 7 May, Industrial Bank(IB)received regulatory approval to establish a financial asset investment subsidiary, marking the first AIC (asset investment company)license issuance in eight years and the debut of a joint-stock bank in the AIClandscape. China Merchants Bank(CMB)and CITIC Bank also announced plansto set up AIC subsidiaries.Before this, five AICs have been established in Chinafollowing the 2016 supply-side financial reform, aiming to tackle bad debts.Since2020, they have been allowed to pilot equity investment. Since 2024, as policysupportfortechnologyfinanceaccelerates,regulatorybarriersaroundAICinvestment scope and setup requirements have continued to ease. AICs' directequity investment has opened new avenues for banks to support tech innovationand pursue comprehensive transformation. Nevertheless, capital consumption andrisk management challenges still warrant our attention. We expect strong-capital,well-diversified large banks to take the lead, potentially bringing more patientcapital to innovation-driven enterprises. AnalystHE YatingSAC No. S0570524070008SFC No. BUB018heyating@htsc.com+(86) 10 6321 1166 AnalystPU JiayiSAC No. S0570123070039SFC No. BVL774pujiayi@htsc.com+(86) 755 8249 2388 Policy focus: looserAIC policies poised to boost tech innovationThescope ofAIC equity investmentpilots,establishmentrequirements, andfunding channels have been steadily expanding. In September 2024, the NationalFinancialRegulatory Administration (NFRA) issued two policy documents thatexpanded pilot cities from Shanghai to 18 cities nationwide, raised the limit ofon-balance-sheet equity investment from 4% to 10% of total assets, and increasedthe investment ratio cap onsingle private equity(PE)fund from 20% to 30%. InMarch 2025, further support was introduced: 1) The pilot scope was expanded toentire provinces covering the 18 cities; 2) Qualified banks were encouraged toestablish AIC subsidiaries; 3) Insurance fundswere encouraged to invest in AICs.Following these changes, equity investment deals have accelerated. On 7 May, theNFRA disclosed that over RMB380.0bn worth of deals have already been signed.Licensing approvals have also picked up pace: IB was approvedto establish thesixth AIC in China, with CMB and CITIC Bank announcing new subsidiaries. Source: Wind, Huatai Research Historical context: from debt/equity swaps to direct investmentAICs were initially created to resolve banks' non-performing loans (NPLs), and with policy support,they gradually began exploring equity investment businesses.Launched amid the supply-side reform starting in 2016, AICs were originallyintended to address potential NPLs that emerged during the banking sector's assetquality deterioration cycle beginningin 2013 through market-based approaches. In2020,theywereofficiallyapprovedtopilotequityinvestmentsinShanghai,marking a shift from pure debt resolution to capital investment. Compared withnational asset management companies (AMCs) or market-based PE/VC firms,AICs benefit from parent-bank synergy and a prudent operating style. While theirdisposal flexibility on acquired assets is narrower than that of AMCs, they offerbetter integration with parent bank resources. Although AICs remain in the earlystages of equity investment relative to market-based PE/VC institutions, theypossess deep capital bases and patient investment capacity. Equity investment offers growth potential but also challengesFor AICs, equity investment creates new growth opportunities. We believe it could helpdiversifybusinesslayout,expandcustomercoverage,andenhanceprofitability. However, it may also introduce liquidity management, capital usage,and risk control complexities. For parent banks, AICs still represent a small portionofoveralloperations–contributinganaverageofjust1.4/0.3%ofthenetprofit/total assets of China's Big Five banks in 2024.Their key value lies inpenetrating customer segments beyond traditional lending, which could in turnboost deposits, loans, and fee income. However, equity investment by banks maybe subject to a 1250% risk weight, potentially resulting in significant capitalconsumption. As entry barriers are lowered, large banks with stronger capitalbases and better diversification capabilities are likely to expand proactively into thisspace, offering long-term stable funding to innovation-driven sectors. Risks: weaker policy implementation/economic recovery than we expect. Disclaimers Analyst CertificationI/We, SHEN Juan, HE Yating, PU Jiayi, hereby certify that the views expressed in this report accurately reflect the personal viewsof the analyst(s) about the subject securities or issuers; and no part of the compensation of the analyst(s) was, is, or willbe,di