\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 998 China Citic Bank Corporation Limited(601998) )
Performance overview
2021a China Citic Bank Corporation Limited(601998) net profit attributable to parent company + 13.6% year on year, growth rate + 0.5pc month on month; Revenue + 5.0% year-on-year and growth rate + 1pc month on month; Roe 10.7%, year-on-year + 0.6pc; ROA 0.72%, year-on-year + 3bp. The balance of non-performing loans in 2021q4 was – 4.1% month on month, the non-performing rate was 1.39%, the month on month ratio was – 9bp, the provision coverage rate was 180%, and the month on month ratio was – 4.5pc.
Performance growth upward
2021a China Citic Bank Corporation Limited(601998) net profit attributable to parent company + 13.6% year on year, growth rate + 0.5pc month on month; Revenue increased by + 5.0% year-on-year and + 1pc month on month. Since 2021, revenue growth has improved quarter by quarter, mainly due to the increase of non interest income growth. Looking ahead, the continuous improvement of asset quality and the upgrading of new retail strategy will strongly support performance growth. Specifically: 2021a China Citic Bank Corporation Limited(601998) net interest income was – 1.7% year-on-year, with the growth rate unchanged month on month, mainly affected by the slowdown of loan growth; Non interest income increased by + 28.1% year-on-year and + 6.6pc month on month. The growth rate of intermediate income and other non interest income increased month on month. The year-on-year growth rate of intermediate income increased by 4pc to 24.4%, and the year-on-year growth rate of other non interest income increased by 11.7pc to 35.2%; 2021a China Citic Bank Corporation Limited(601998) asset impairment loss was – 7.2% year-on-year, and the impairment pressure was reduced; Cost income increased by 2.5pc compared with last year, mainly due to the low base effect.
Retail strategy upgrade
The retail strategy has achieved initial results, and 2021a China Citic Bank Corporation Limited(601998) achieved large wealth management revenue of 14.96 billion yuan, a year-on-year increase of 56.2% China Citic Bank Corporation Limited(601998) proposes to build a “new retail” with wealth management as the core traction, and tilt resources to retail business. The goal is to achieve more than 50% of retail business revenue within two to three years (40% of China Citic Bank Corporation Limited(601998) retail banking revenue in 2021), which will strongly support revenue growth.
The main measures of new retail: ① optimize the organizational structure. In November 2021, China Citic Bank Corporation Limited(601998) merged some teams and functions of the former retail banking department and digital finance department into the new wealth management department, integrating product, channel and customer management, and improving customer service ability. ② Customer operation was deepened. Through the business model of “customer journey operation + characteristic customer group operation”, the number of wealth customers was effectively increased. VIP and wealthy customers increased by more than 100000, and the number of private customers increased by 18% year-on-year. ③ Through the linkage of sectors, the new retail development is enabled through the three sectors of “wealth management, asset management and comprehensive financing”. At the same time, the cross sales scale of retail products increased by 95% to 87.6 billion yuan in 2021.
Adverse events continued to decline
In terms of non-performing loans, the balance of 2021q4 China Citic Bank Corporation Limited(601998) non-performing loans was – 4.1% month on month, the non-performing rate was 1.39%, and the month on month ratio was – 9bp. The non-performing loans decreased for five consecutive quarters. At the same time, the concern rate of forward-looking indicators increased to 1.75% compared with 21h1-41bp, the best level in recent eight years. In terms of provision, the coverage rate of China Citic Bank Corporation Limited(601998) provision in 2021q4 was – 4.5pc to 180% month on month, still at a high level in recent three years. At the same time, according to the disclosure of the performance press conference, China Citic Bank Corporation Limited(601998) increased the provision for real estate loans, and the overall allocation ratio exceeded 6%, twice that of corporate loans. With the promotion of risk management measures such as “controlling the new and clearing the old”, it is expected that the asset quality indicators are expected to continue to be optimized.
The profit forecast and valuation predict that the net profit attributable to the parent company from 2022 to 2024 will increase by 13.80% / 14.10% / 14.49% year-on-year, corresponding to bps11 38 / 12.49/13.76 yuan shares. The current price corresponds to 0.40/0.37/0.33 times of Pb valuation. Maintain the target price of 7.31 yuan / share, corresponding to 0.64x Pb in 22 years, the current price corresponds to 0.40x Pb in 22 years, and the current price space is 60%.
Risk tip: macroeconomic stall and sharp outbreak of adverse
