\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 166 Industrial Bank Co.Ltd(601166) )
Event description
The company released its 2021 annual report, with annual revenue of 221236 billion yuan, a year-on-year increase of + 8.91%; The net profit attributable to the parent company was 82.680 billion yuan, a year-on-year increase of + 24.10%, with a weighted average roe13.5% 94%, an increase of 1.32 percentage points over the same period last year.
Event comments
Profit growth of provision for slow release: roe returned to the rising channel and profitability improved. The growth rate of the company’s annual operating revenue and net profit was 8.91% / 24.10% respectively, which continued to increase by 0.83/0.65 percentage points compared with the first three quarters. The provision for impairment was 67 billion yuan in 2021, a year-on-year decrease of 11%. Provision for slow release promoted the growth rate of net profit. Non interest income achieved rapid growth: non interest income was 75.6 billion, an increase of 27%, of which the net fee income was 42.7 billion, an increase of 13%, and the investment income increased by 10.9 billion. Non interest income drove the growth of the company’s operating revenue and net profit.
The assets were put into operation steadily and the interest income was stable: the net interest margin was 2.29%, a year-on-year decrease of 7bp. The investment in assets increased steadily, with total assets increasing by 8.98%, total liabilities increasing by 8.77%, the growth rate slowed down compared with the first three quarters, and the balance of various loans increased by 11.66%, the growth rate being the same as that at the end of the third quarter. The loan yield was 5.03%, down 27bp, and the yield on interest bearing assets was 4.36%, down 14bp. The balance of deposits increased by 6.63%, which was higher than that at the end of the third quarter. The cost ratio of interest bearing liabilities decreased 2bp to 2.34%.
Three business cards of green bank, fortune bank and investment bank: 1) Green Bank: the number of customers and financing scale maintained rapid growth, and the balance of green loans was 453.94 billion yuan (according to the central bank), an increase of 42.11% over the end of the previous year; Successfully obtained the preferential fund of 5.009 billion yuan (interest rate 1.75%) for carbon emission reduction support tools and enjoyed the policy dividend; The financing scale of green investment banks was 115.6 billion yuan, a year-on-year increase of three times. 2) Fortune Bank: the scale of retail AUM was 2.85 trillion yuan, with a year-on-year increase of 9.01%, the wealth management income increased by 20.42%, and the fund consignment income increased by 104%; Expand interbank sales channels, with a sales scale of 667.6 billion yuan, an increase of 429%. 3) Investment banking: the company accelerated the transformation from holding assets to managing assets, promoted the strategy of “commercial bank + investment bank”, and the balance of corporate financing (FPA) was 7 trillion, an increase of 15.49%; The growth rate of off balance sheet corporate financing balance was 21.90%, and the growth rate of investment bank off balance sheet non-traditional corporate financing balance was 33.21%, both faster than the growth rate of on balance sheet corporate financing balance (8.59%).
Improve asset quality and enhance risk resistance: the balance and ratio of non-performing loans decreased, and the non-performing loan ratio decreased by 1.10%, down 0.15 percentage points; The provision coverage rate was 268.73%, an increase of 49.90 percentage points over the end of the previous year; As the recognition standard of overdue credit card loans is advanced, the attention rate has increased, most of which are temporarily overdue. After the reminder of collection, customers can repay the loans, and it is not expected to be further transferred to non-performing loans. Real estate business: the balance of real estate business inside and outside the balance sheet is 1.65 trillion, and the non-performing rate is 1.34%. Among them, the mortgage accounts for 68%, the balance of first and second tier cities accounts for 71%, LVT (mortgage balance / mortgage value) 44%, and the mortgage loan risk is small. The mortgage and regional layout of corporate real estate business are relatively safe, and the provision is higher than the overall corporate coverage.
Investment advice
The current valuation of the company is only 0.71 times, with high cost performance. At the same time, the asset quality is stable and good. The provision slow-release provides space for the release of future performance. Employee stock ownership shows confidence and is optimistic about the future performance growth of the company. It is estimated that the company’s revenue from 2022 to 2024 will be 221236 billion yuan, 243734 billion yuan and 266398 billion yuan respectively, the net profit attributable to the parent company will be 82.680 billion yuan, 96.325 billion yuan and 108548 billion yuan respectively, the EPS will be 3.98, 4.64 and 5.23 respectively, the net assets per share will be 33.42, 34.81 and 38.37, and the corresponding Pb will be 0.62, 0.59 and 0.54 times respectively. Give “overweight” rating.
There are risks
A sharp decline in macro-economy; Major risk events occur in the company; Local outbreaks are repeated.
