\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 818 China Everbright Bank Company Limited Co.Ltd(601818) )
Summary of annual report data: China Everbright Bank Company Limited Co.Ltd(601818) 2021 net profit of 43.4 billion, an increase of 14.7% year-on-year. The net income of handling charges increased by 11.9% year-on-year, and the operating income increased by 7.14% year-on-year; The cost income ratio was 28.02%, 1.61 percentage points higher than that in 2020. At the end of the year, total assets increased by 9.95%, total loans increased by 9.90% and total deposits increased by 5.61% compared with the beginning of the year. The year-end non-performing rate was 1.25%, the provision coverage rate was 187%, the allocation loan ratio was 2.34%, and the core tier 1 capital adequacy ratio was 8.91%.
China Everbright Bank Company Limited Co.Ltd(601818) relying on Everbright Group’s “great people’s livelihood” ecosystem and “great wealth” ecosystem, the growth rate of handling fee income exceeded 10%. The company accelerated the identification and disposal of non-performing products, the rate of non-performing products and the generation rate decreased, and the provision coverage rate rebounded steadily. Give overweight rating.
Key points supporting rating
In the fourth quarter, the handling fee income increased by 19% year-on-year, and the provision made a positive contribution to the growth of net profit
China Everbright Bank Company Limited Co.Ltd(601818) 4 quarter’s net fee income maintained a rapid growth, and the annual net fee income increased by 1.7 percentage points to 11.9% compared with the first three quarters, mainly due to the 58% year-on-year increase in financial service fee income. In 2021, the proportion of non interest income increased to 26.58%, with a year-on-year increase of 4.22 percentage points. The annual net interest income increased by 1.32% year-on-year; Revenue increased by 7.14% year-on-year, slower than that in the first three quarters (+ 9.25%, YoY). The company’s profit before provision increased by 5.1% year-on-year, but the provision decreased by 3.8% year-on-year, which made a positive contribution to the performance. In 2021, the net profit increased by 14.7% year-on-year.
The non-performing rate decreased significantly in the fourth quarter, and the recognition of non-performing of public real estate increased
China Everbright Bank Company Limited Co.Ltd(601818) 2021 year-end non-performing rate decreased by 9bp to 1.25% month on month compared with the third quarter, with significant quarterly improvement, which is expected to be related to the increase of non-performing disposal. In the first and second half of 2021, 24.6 billion and 29.7 billion loans were written off and disposed of respectively. We calculated that the annual non-performing rate was 1.68%, down 30bp year-on-year. In terms of the regional division of non-performing loan balance, the proportion of the Pearl River Delta increased to 23.8%; In terms of industry, the increase of non-performing loans in the second half of the year is mainly in real estate and construction, which is expected to be affected by the increased operating pressure of real estate enterprises. The regulation has successively issued policies to maintain the stability of real estate, and it is necessary to further observe the sales and operation of real estate enterprises.
Valuation
Considering the adjustment of the company’s credit structure and deposit performance, we adjusted the company’s EPS to 0.90/0.98 yuan in 2022 / 2023 (formerly 0.92/1.03 yuan). At present, the stock price corresponds to 0.42x/0.39x Pb in 2022 / 2023, giving an overweight rating.
Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Regulatory control exceeded expectations.
