\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Event:
On March 10, Bank Of Hangzhou Co.Ltd(600926) released the performance express for 2021, which realized an operating revenue of 29.361 billion in 2021, with a year-on-year increase of 18.4%; The net profit attributable to the parent company was 9.261 billion yuan, a year-on-year increase of 29.8%. The weighted average return on net assets was 12.33%, an increase of 1.19 percentage points year-on-year.
Comments:
The operating revenue has strong support, and the profit growth rate has risen to a high of nearly 30%. In 2021, Bank Of Hangzhou Co.Ltd(600926) revenue and net profit attributable to parent company increased by 18.4% and 29.8% year-on-year respectively, with the growth rate of – 1.6pct and 3.6pct respectively compared with 1-3q, of which the single quarter revenue and net profit attributable to parent company of 4q increased by 13.5% and 42.7% year-on-year respectively. The revenue growth is expected to be mainly supported by the maintenance of high-speed expansion of the asset side and strong interest margin toughness. The profit growth continues to increase quarter on quarter. It is expected to mainly benefit from the improvement of credit costs under the condition of continuous improvement of asset quality.
The asset side maintains strong growth momentum and has strong ability to obtain core liabilities. At the end of 2021, Bank Of Hangzhou Co.Ltd(600926) total assets and loans increased by 18.9% and 21.7% year-on-year respectively, and the growth rate changed by -0.8pct and 2.1pct respectively compared with the end of 3q. Among them, the new loan of 4q in a single quarter was 25.101 billion yuan, an increase of 12.576 billion yuan year-on-year, benefiting from the strong economic vitality of the region, the strong capital demand of enterprises and residents, and the strong growth of credit supply; On the liability side, under the pressure of “stabilizing and increasing deposits” in the banking industry in 2021, the deposit growth rate at the end of Bank Of Hangzhou Co.Ltd(600926) each quarter in the second half of 2021 was stable at a high level of more than 16%, highlighting the strong ability to obtain core liabilities.
The non-performing loan ratio fell below 0.9%, and the provision coverage ratio further thickened to 568%. By the end of 2021, Bank Of Hangzhou Co.Ltd(600926) NPL ratio had decreased by 4bp quarter on quarter to 0.86%, which was a low level for listed banks. The provision coverage increased by 8.3pct to 567.7% quarter on quarter, and the provision thickness continued to be at the leading level in the industry.
Earnings forecast, valuation and rating Bank Of Hangzhou Co.Ltd(600926) is rooted in economically developed Zhejiang and other regions. In recent years, with the continuous promotion of retail transformation, the growth rate of revenue and profit has been outstanding. Since the beginning of the year, Bank Of Hangzhou Co.Ltd(600926) credit has been in the process of “Pro cycle” and “positive cycle”. The superposition of “Hangzhou bank convertible bonds” has a large space for equity conversion, and the company has a large potential growth momentum. Considering that with the deepening of the integration construction of the Yangtze River Delta, the regional economy has ushered in important development opportunities, and the company is expected to further open up profit space, We raised the company’s EPS forecast from 2021 to 2023 to 1.56 yuan (+ 7.5%) / 1.89 yuan (+ 10.7%) / 2.21 yuan (+ 9.6%), and the corresponding Pb valuation of the current stock price was 1.11/0.99/0.88 times respectively, maintaining the “buy” rating.
Risk tip: “credit easing” is not as expected, which will drag down the pace of credit supply, and the increasing downward pressure on the economy may affect the quality of assets.
