\u3000\u3 China Vanke Co.Ltd(000002) 966 Bank Of Suzhou Co.Ltd(002966) )
Abstract: Bank Of Suzhou Co.Ltd(002966) in 2021, the net profit was 3.1 billion yuan, with a year-on-year increase of 21%. The performance growth mainly comes from the rapid growth of scale and medium income, and the contribution of less provision for incremental provisions. Among them, the net interest income increased by 0.1% year-on-year, the net fee income increased by 29.4%, other non interest income increased by 9.5% year-on-year, and the operating income increased by 4.5% year-on-year; At the end of the year, total assets increased by 16.7%, loans increased by 13.4% and deposits increased by 11.3% compared with the beginning of the year. The year-end non-performing rate was 1.11%, the provision coverage rate was 422.91%, and the core tier 1 capital adequacy ratio was 10.37%.
Bank Of Suzhou Co.Ltd(002966) the annual report performance in 2021 continued to grow rapidly. The performance growth mainly comes from the rapid growth of scale and medium income, and the less provision of incremental provisions driven by the improvement of asset quality. The report has excellent performance in terms of handling fees and asset quality: the handling fee income has continued to grow at a high level year-on-year, mainly driven by the high growth of financial management business. Risk indicators have been comprehensively optimized, asset quality has been significantly improved, incremental provision has decreased year-on-year, stock provision indicators have increased, and risk defense capability has been significantly improved. At the same time, the net interest margin in the fourth quarter was still downward, and the pressure on interest margin continued. The rapid growth of the company’s performance promotes the improvement of profitability, has advantages in capital, good asset quality and sufficient provisions, and the future performance will continue to grow rapidly and sustainably.
Key points supporting rating
The net interest margin continued to decline. Financial management promoted the rapid growth of net procedures. The annual net interest margin was 1.91%, down 4bp from the first three quarters. It is estimated that the single quarter was 1.81%, down 7bp from the third quarter. The handling fee income increased by 29.4% year-on-year, mainly relying on the year-on-year increase of 69% in financial income, accounting for 59%.
The quality of stock provision has been significantly improved.
The non-performing rate was 1.11%, down 6BP from the previous quarter, and the balance of non-performing loans decreased by 2.9% year-on-year. The generation rate of non-performing loans (annualized) was 0.24%, a year-on-year decrease of 0.48 percentage points. Overdue, concerned and other indicators were improved. The provision coverage rate was 422.91%, a year-on-year increase of 1.31 percentage points, an increase of 0.12 percentage points over the third quarter.
Valuation
The company has significant geographical advantages, strong capital strength, rapid growth in scale, good asset quality, high provision level, large provision back feeding space in the future, rapid growth or sustainable performance. We raised the company’s EPS to 1.14/1.35 yuan in 2022 / 2023 (originally 1.09/1.28 yuan). At present, the stock price corresponds to 0.62/0.55 times of Pb in 2022 / 2023, maintaining the overweight rating.
Main risks of rating
The economic downturn led to the deterioration of asset quality exceeding expectations and financial supervision exceeding expectations.
