\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the operation announcement from January to February: from January to February 2022, the company realized an operating revenue of 1.668 billion yuan, a year-on-year increase of 27.94%; The net profit attributable to ordinary shareholders was 481 million yuan, a year-on-year increase of 25.64%. By the end of February 2022, the total assets of the company were 266.5 billion yuan, an increase of 8.07% over the beginning of the year; The total loan was 172.3 billion yuan, an increase of 5.80% over the beginning of the year; The total deposit was 204.2 billion yuan, an increase of 11.56% over the beginning of the year. The non-performing loan ratio was 0.81%, and the provision coverage was 520.98%.
Key points supporting rating
The performance is bright, the regional credit demand is strong, and the non-performing rate is the same as that at the end of 2021
In January, the company released the performance express of 2021, and the revenue and net profit increased by 16.27% and 21.13% year-on-year respectively. The performance from January to February 2022 was brilliant. We believe that the high performance growth benefits from the better credit demand in the region and the company’s outstanding market competitiveness. At the end of February, the assets / loans increased by 8.07% and 5.80% respectively compared with the beginning of the year, and increased by 16.1% and 23.5% respectively compared with the end of March 2021. The company’s deposits increased by 11.56% over the beginning of the year, with excellent deposit growth.
The non-performing loan ratio of the company at the end of February was 0.81%, the same as that at the end of 2021; The provision coverage rate is 520.98%, which is 11 percentage points lower than that at the end of 2021, or remains in the forefront of listed banks. More data need to be disclosed for the calculation of bad debt generation.
Releasing positive signals will help boost market sentiment
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) is the first listed bank to announce its monthly performance, which we believe also reflects the company’s confidence in its own operation. Recently, affected by the conflict between Russia and Ukraine, financial sanctions from the United States and Europe, fluctuations in overseas markets and other factors, the Chinese market has adjusted significantly. Today, many leading enterprises released monthly operating data for the first time, which we believe will help boost market sentiment.
Investment advice
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the first monthly operation report of listed banks, releasing a positive signal of confidence in their own operation. The company’s revenue and profit increased sharply in the first two months, and the regional credit demand was strong; The non-performing rate is the same as that in 2021, and the provision coverage remains high. We continue to be optimistic about the strategic upgrading of the company’s small and micro enterprises, and the performance is expected to continue to grow rapidly. In our core recommendation portfolio, the company reiterates its optimism and focuses on recommendation.
Valuation
Raise the company’s EPS from 2021 to 2022 to 0.80/0.97 yuan (formerly 0.78/0.90 yuan). At present, the corresponding price to book ratio of the stock price is 1.01x/0.93x. It is optimistic about the strategic upgrading of the company’s small and micro enterprises and gives an overweight rating.
Main risks of rating:
The economic downturn exceeded expectations; The deterioration of asset quality exceeded expectations.
