\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 939 China Construction Bank Corporation(601939) )
Key points
Event:
On March 29, China Construction Bank Corporation(601939) released the annual report for 2021. The annual operating revenue was 824246 billion yuan, yoy + 9.05%, and the net profit attributable to the parent company was 302513 billion yuan, yoy + 11.61%. The weighted average return on net assets is 12.55% (YoY + 0.43pct).
Comments:
Performance growth remained stable. The year-on-year growth rates of CCB’s revenue, profit before provision and net profit attributable to the parent company in 2021 were 9.05%, 3.91% and 11.61% respectively, down 0.22, 2.02 and 1.18 PCT respectively compared with the first three quarters. However, the growth rate of revenue and profit was still significantly higher than the level at the end of 2020, and the growth rate of various performance indicators showed a steady and positive trend. From the perspective of performance split: (1) the scale contribution was further improved, reaching 18.31% in 2021, an increase of 1.49pct compared with the first three quarters, and the net interest income continued to “make up the price by volume”; (2) The contribution rate of non interest income is 14.31%, which still contributes greatly to profits; (3) The provision has increased slightly, and the marginal contribution to profit has decreased.
Loans increased rapidly, and the proportion of housing related loans remained stable. The year-on-year growth rate of CCB’s loans at the end of 2021 was 12.05%, an increase of 1.5pct over the end of the previous quarter, and the proportion of loans in interest bearing assets increased by 0.84pct to 62.5% quarter on quarter. In terms of loan structure:
(1) in the fourth quarter, credit resources were further inclined to retail business. The increment of retail loans accounted for 58.9%, an increase of about 13 percentage points compared with the third quarter, the increment of bill financing accounted for 24.03%, an increase of 8.4 percentage points compared with the third quarter, and the increment of corporate loans decreased by 21.6 percentage points to 17.1% compared with the third quarter.
(2) the proportion of housing related loans is generally stable. In the second half of 2021, CCB’s real estate loans and mortgage loans increased by 268.3 billion, an increase of less than 10 billion year-on-year. At the end of the year, the stock of housing related loans accounted for 38.84%, which was basically the same as that at the end of the second quarter.
Structural adjustment helps to improve the margin of interest rate spread. The annual interest margin of CCB in 2021 was 2.13%, a slight increase of 0.01pct compared with the first three quarters. The loan yield was 4.25%, down 0.02pct from the first half of the year. The deposit cost ratio was 1.67%, unchanged from the first half of the year. The main reasons for the marginal improvement of interest margin in the fourth quarter: first, in the fourth quarter of last year, under the increasing downward pressure of the economy and insufficient effective demand, the interest rate of corporate loans faced a certain downward pressure, and the corporate credit was moderately inclined to the retail end, which helped to stabilize the interest margin through structural adjustment. Second, on the liability side, although the competition pattern of core deposits is still fierce, positive effects such as the reform of deposit interest rate quotation mechanism are also gradually emerging. In addition, the downward interest rate in the financial market also helps to improve the cost of market liabilities.
Non interest income maintained a high growth. The non interest income of CCB in 2021 increased by 21.6% year-on-year, down 0.7pct from the first three quarters, but still at a high growth level. Among them, the net income from handling charges and commissions increased by 6% year-on-year, and the growth rate decreased by 0.2pct quarter on quarter; Net other non interest income increased by 48.9% year-on-year, and the growth rate decreased 1PCT quarter on quarter. It is mainly driven by investment income (YoY + 23%), profit and loss from changes in fair value (profit of 2.686 billion yuan in the fourth quarter of 2021, compared with 1.944 billion yuan in the same period of last year). It is expected to benefit from the current capital market and interest rate environment.
Asset quality continued to improve and capital adequacy ratio continued to improve. In terms of asset quality, as of the end of the 21st century, the non-performing loan ratio of CCB was 1.42%, a month on month decrease of 9bp, the non-performing rate + concern rate was 4.11%, a decrease of 22bp compared with the end of the first half of the year, the provision coverage increased by 11.41pct to 239.96% quarter on quarter, and the risk offset ability was further enhanced. In terms of capital adequacy ratio, by the end of the 21st century, CCB’s core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 13.59%, 14.14% and 17.85% respectively, with quarterly growth of 0.19, 0.18 and 0.60pct respectively.
Earnings forecast, valuation and rating China Construction Bank Corporation(601939) excellent management, strong innovation ability, and good performance in various business indicators after the epidemic. In recent years, the investment in roe has been increased and the competitiveness of CCB has been continuously enhanced. The company has a good retail deposit base and can maintain the deposit cost at a relatively low level under the increasing competitive pressure of core deposits. The safety margin of the company’s capital adequacy ratio has been continuously consolidated, and the core Tier-1 capital adequacy ratio has reached 13.59%, which can lay a solid foundation for the company’s subsequent credit supply. In view of this, we raised the EPS forecast for 20222023 to 1.33 yuan (up 9.0%) and 1.41 yuan (up 9.3%) respectively, and increased the EPS forecast for 2024 to 1.49 yuan. The current Pb valuation corresponding to the stock price is 0.57/0.52/0.48 times respectively, maintaining the “buy” rating.
Risk tip: if the economic recovery is less than expected, it may affect the strength and quality of the company’s credit supply.
