\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 036 China Merchants Bank Co.Ltd(600036) )
China Merchants Bank Co.Ltd(600036) 2021 annual report performed well. The growth rate of its net profit in the fourth quarter of last year was 26.76%. The expansion of scale, the widening of net interest margin year-on-year and the reduction of the pressure on provision are the main drivers of performance growth, while the increase of cost expenditure and tax revenue are a slight drag on performance.
\u3000\u30001. The growth rate of net interest income in the fourth quarter of 2021 was 14.59%, 6.96pc higher than that in 2021q3, mainly due to the accelerated expansion of scale and the year-on-year expansion of net interest margin by 7bp.
\u3000\u30002. In the fourth quarter of 2021, the growth rate of net income from handling fees and commissions was 15.42%, an increase of 3.64pc compared with the growth rate of 2021q3, mainly benefiting from the “multi-point flowering” of wealth management, asset management, custody income and settlement and clearing income.
\u3000\u30003. The increase in expenses is a drag on the growth of profit before provision. It is estimated that this is mainly due to the substantial increase in the number of employees in 2021, resulting in a corresponding increase in employee expenses, but it may be a short-term factor.
\u3000\u30004. At the end of the fourth quarter of last year, China Merchants Bank Co.Ltd(600036) asset quality performed steadily. The non-performing rate was relatively stable, the real estate risk exposure tended to ease, and the provision coverage rate increased significantly to 483.87% month on month; Finally, the downward trend of broad credit cost drove the growth of net profit to pick up.
\u3000\u30005. The retail business has developed steadily with outstanding growth. At the end of the fourth quarter of last year, most of the retail business indicators of China Merchants Bank maintained a growth trend of about 20%, and still had good growth while maintaining good development quality.
Investment suggestion: we expect the company’s revenue growth rate to be 13.70% and net profit growth rate to be 18.23% in 2022. The six-month target price is 65.52 yuan, equivalent to 2.24pb in 2021.
Risk tip: the development of wealth management business is less than expected, and the asset quality is worse than expected
