“Just kidding, 14 yuan Ping An Bank Co.Ltd(000001) (share price) should be cherished. This price may be rare in the future.” On March 10, Zhou Qiang, Secretary of Ping An Bank Co.Ltd(000001) board of directors, responded when answering a question from a reporter of Shanghai Securities News.
He said that in the five years since the transformation, Ping An Bank Co.Ltd(000001) fundamentals have been very stable and exceeded expectations in many aspects, but these were not reflected in the stock price. Therefore, the current stock price can not fully reflect the valuation, but it can not blame the market. It can only say that our own work is not in place.
The joint-stock bank, which has attracted much market attention, took the lead in disclosing the 2021 annual report yesterday. During the reporting period, the performance of various indicators from revenue and net profit to non-performing rate and provision rate were stable. At the same time, the bank also took the initiative to expose the real estate risk exposure worried by the market.
At the performance presentation meeting held today, Xie Yonglin, chairman of Ping An Bank Co.Ltd(000001) said that he was full of confidence in the growth of revenue in 2022. The core reason was that the growth point of each business segment was very clear and the risk foundation was solid and reliable. He said: “after five years of efforts, the three major factors of retail transformation, performance growth and asset safety have finally been recognized by the market, which makes us feel that there is a long way to go.”
revenue growth new momentum
According to the annual report, Ping An Bank Co.Ltd(000001) 2021 achieved an operating revenue of 169383 billion yuan, a year-on-year increase of 10.3%; The net profit was 36.336 billion yuan, a year-on-year increase of 25.6%. By the end of the reporting period, the non-performing loan ratio was 1.02%, down 0.16 percentage points from the end of 2020; The provision coverage rate was 288.42%, an increase of 87.02 percentage points over the end of the previous year.
According to the above data, the growth rate of net profit is the first in the joint-stock bank, the asset quality has improved, and the provision rate has also reached the high point of the bank since 2018, but there are also deficiencies – as the growth rate of single quarter revenue in the second quarter was only 6.2%, which has dragged down the performance of annual revenue growth.
At the performance presentation meeting, Xie Yonglin responded that there was a little pressure on the revenue in the second quarter of last year. First, due to factors such as bond bull market, the revenue base in the second quarter of 2020 is high; Second, the overall economic environment in 2021 is complex, including changes in the real estate market.
Xie Yonglin said that for the sake of prudence, Ping An Bank Co.Ltd(000001) made two major moves in 2021: first, tightened the Commission access of private wealth management, affecting the intermediate business income of private wealth management; Second, significantly tighten the access threshold and quota management of credit cards. Therefore, in the retail business in 2021, the consignment of private wealth management and the revenue of credit cards are obviously under pressure, which is also the initiative of Ping An Bank Co.Ltd(000001) .
“Unless there are major unpredictable factors, we still have great expectations for the revenue to maintain growth in 2022.” Xie Yonglin said, “in the first two months of this year, the growth rate of credit card revenue has recovered to nearly 20%.”
The general management said today that from the perspective of the three business lines, Ping An Bank Co.Ltd(000001) revenue growth is mainly driven by three aspects. First, the retail business has a strong momentum of development under the new “five in one” model, there is great room for growth in wealth management, and the consumer finance sector will continue to maintain high growth.
Second, after the restart of corporate business, under the concept of “double light”, it will focus on the two tracks of industrial digitization, capital market and direct financing, build two business systems of science and technology trading bank and complex investment and financing ecology, and establish three centers of capital M & A, specialization and innovation to build a new driving force for corporate business and open a new growth curve.
Third, interbank capital business Ping An Bank Co.Ltd(000001) proposed to refine the trading business and stabilize the income; We should also continue to focus on custody sales and hedging business, and make the business lighter to improve the medium income.
how to face the narrowing of net interest margin
For banks that rely heavily on interest income, the gradual narrowing of net interest margin is a challenge for all. During the reporting period, Ping An Bank Co.Ltd(000001) net interest margin also narrowed slightly.
In response, Xiang Youzhi, vice president and chief financial officer of Ping An Bank Co.Ltd(000001) said that there are mainly two aspects that determine the interest margin level, one is the asset side and the other is the liability side. On the asset side, the pricing of the quoted interest rate (LPR) in the loan market is an important influencing factor, which is equivalent to the benchmark interest rate of the loan. Other influencing factors include the economy itself. From the perspective of the whole industry, there is still a lot of room for downward interest rate spread in the future.
In other words, in the future, banks have to reduce the narrowing as much as possible.
“We also recognize this trend. So how to control the interest rate spread level and make us perform better in the market?” Xiang Youzhi said that in recent years, Ping An Bank Co.Ltd(000001) continued to operate assets and liabilities, and continuously improved the debt capacity on the liability side, so that low-cost and demand deposits can grow faster. This is the most fundamental way. We must put the balance of volume and price in the most important position; On the asset side, we should do a good job in the combination and allocation of assets, so as to maintain a certain rate of return on assets, and comprehensively make the interest margin perform better.
According to the data of 2021, Ping An Bank Co.Ltd(000001) liability side achieved “both volume and price advantages”, which is reflected in the bank’s deposit interest rate of 2.04%, down by 19 BP; The average daily total amount of deposits increased by 10.8%, of which demand deposits increased by 18.2%, and the proportion also increased from 34.8% in 2020 to 37.3%.
share price can you expect something
Since the beginning of the year, market analysts have turned their attention to the undervalued banking sector, believing that this year’s performance of the banking sector will return to that of 2019, with allocation value.
From the perspective of trend, in addition to the excessive market shock in the recent week, the banking sector has indeed gone out of several waves of market, and the valuation of many excellent banks has been repaired. Individual banks, such as Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Chengdu Co.Ltd(601838) , have seen their share prices rise by 14.22%, 14.75% and 20.83% year to date respectively.
Zhou Qiang said: “From the perspective of the sector, the main tone of this year is to broaden credit and stabilize growth, which is a positive and optimistic situation for the banking sector. From the market, last year, everyone gathered to pursue growth stocks, and this year’s style may switch to bank stocks, which is relatively simple and undervalued. At the same time, the sector that can maintain a home and live a life will show it, so bank stocks still have some opportunities this year Yes. “
Zhou Qiang said that although the recent decline is a little large, we are still very confident in Ping An Bank Co.Ltd(000001) or Ping An Bank Co.Ltd(000001) . In particular, today’s reply from the management is a very positive and positive signal to you. There may be a lack of confidence in the market. The Ping An Bank Co.Ltd(000001) management has shown confidence in the process of collectively increasing its stock holdings last year. The increase price of more than 18 yuan is the judgment of the management on the bottom of Ping An Bank Co.Ltd(000001) valuation.
As of today’s close, Ping An Bank Co.Ltd(000001) shares closed at 14.57 yuan / share, up 5.27%. Year to date, the bank’s share price has fallen 11%.
