\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
Matters:
On March 9, 2022, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the monthly performance express, introducing the main business conditions from January to February 2022. 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 the parent company 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.
Ping An View:
Excellent profit performance and significant acceleration of revenue Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) 2022: from January to February, the net profit attributable to the parent company increased by 25.6% (vsyoy + 21.1%, 2021) year on year, and the revenue increased by 27.9% (vsyoy + 16.3%, 2021) year on year. We judge that the rise of the company’s profit growth rate is related to the good credit supply at the beginning of the year, reflecting the relatively strong credit demand in the region.
The scale expanded rapidly, and deposits and loans made a good start. In terms of scale, the total assets of the company at the end of February 2022 increased by 8.1% (vsqoq + 10.0%, 21q1) compared with the beginning of the year. Among them, the loan scale expanded steadily. At the end of February 2022, the total loan increased by 5.8% (vsqoq + 5.9%, 21q1) compared with the beginning of the year, laying a good foundation for the investment of the whole year. In terms of liabilities, the growth rate of deposit scale is outstanding, which has exceeded the level of the first quarter of last year. At the end of February 2022, the deposit increased by 11.6% (vsqoq + 11.5%, 21q1) compared with the beginning of the year.
Asset quality continued to stabilize and provision coverage remained high. At the end of February 2022, the non-performing rate of the company was 0.81%, unchanged from 21q4, and the performance of asset quality stabilized, down 14bp from the end of the first quarter of 2021, which is at the leading level in the industry. At the end of February 2022, the provision coverage rate of the company was 521%, down 11 PCT from the end of 2021, up 33 PCT from 21q1, still maintaining a high level in the industry. Looking forward to 2022, relying on the excellent regional background and the relatively scattered customer base structure brought by the long-term deep cultivation of small and micro businesses, we expect the pressure on the asset quality of the company to be controllable in the future.
Investment suggestion: the performance express has a bright performance and is optimistic about the long-term development space of small and micro businesses Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) deeply cultivate the local county economy and small and micro enterprises. The local advantages and the business differentiation of small and micro enterprises are obvious, and the retail and small and micro businesses are developing steadily. Over the past 21 years, the interest margin that has dragged down the company’s revenue and profit performance has stabilized and repaired, the profit growth rate has maintained rapid growth, and the asset quality has been stable and good. Looking forward to the future, with the support of good regional economy, the company’s fundamentals are expected to continue to improve. Combined with the company’s performance express, we maintain the company’s performance forecast unchanged. It is estimated that the company’s EPS in 2022 and 2023 will be 0.94/1.08 yuan respectively, and the corresponding profit growth rate will be 18.2% / 15.1% respectively. At present, the company’s share price corresponds to 0.95x/0.87x Pb in 2022 / 2023 respectively. We are optimistic about the development space of the company’s small and micro business for a long time and maintain the “strongly recommended” rating.
Risk tips: 1) macroeconomic downturn leads to higher pressure on industry asset quality than expected; 2) The strength of financial supervision increased more than expected; 3) The escalation of Sino US friction has led to an increase in external risks.
