\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 187 Xiamen Bank Co.Ltd(601187) )
Event:
On March 29, Xiamen Bank Co.Ltd(601187) released the annual report of 2021. The annual operating revenue was 5.316 billion yuan, yoy-4.3%, and the net profit attributable to the parent company was 2.169 billion yuan, yoy + 19.0%. The weighted average return on net assets is 10.98%, yoy-0.25pct.
Comments:
Under the high base effect, the growth of revenue slowed down and the profit maintained a high growth. The annual operating revenue and net profit attributable to the parent company increased by – 4.3% and + 19.0% respectively year-on-year, down 7.5% and 1.6pct respectively compared with 1-3q21. Split the year-on-year growth structure, with asset scale expansion and provision as the main contribution sub items, driving the performance growth rate of 36.2 and 54.0 PCT respectively. On a month on month basis, the year-on-year growth rate of the company’s revenue decreased compared with that of 1-3q21, mainly because the revenue from Bill asset management business recovered by the company through litigation in the same period of last year increased the base, and the revenue in 20q4 increased significantly month on month (QoQ + 76.8%). If this incomparable factor is excluded, the year-on-year growth rate of the company’s revenue in 2021 is close to 9%, which is further higher than that of 1-3q21; The net profit attributable to the parent company maintained a high increase, mainly supported by provision factors. The provision for credit and asset impairment losses was 208 million yuan in the fourth quarter, with a year-on-year decrease of 458 million yuan.
The proportion of loans increased and the asset structure was further optimized. At the end of 2021, the total assets of the company increased by 15.6% compared with the end of the previous year, and the growth rate decreased by 2.3pct compared with the end of 21q3. Among them, the new assets in the fourth quarter were 9.735 billion yuan, a year-on-year decrease of 4.174 billion yuan. The expansion of the company’s 21q4 statement was weaker than that in the same period last year, which was a drag on the net interest income. Structurally, 21q4 credit expansion slowed down, but it is still the main allocation direction. In the fourth quarter, new loans accounted for 62.8% of new interest bearing assets, and the proportion of stock loans in interest bearing assets increased by 0.3pct to 53.3% compared with the end of the previous quarter. The asset structure was further optimized.
Manufacturing industry is the largest investment in corporate loans, and new personal loans focus on personal business loans. In the past 21 years, the company’s new loans increased by 34.393 billion, an increase of 1.916 billion year-on-year. The strength of bill issuance weakened, the focus of credit resources was on the public and retail fields, and the credit structure was optimized. Specifically: 1) corporate loans increased by 18.913 billion, an increase of 6.974 billion year-on-year, mainly invested in leasing and business services, manufacturing and construction, accounting for 26.9%, 21.6% and 18.7% respectively; 2) Retail credit increased by 13.190 billion, basically the same year-on-year. The new personal loans in the fourth quarter accounted for 35.9% of the new personal loans in the whole year, and the investment intensity was significantly greater than that in the first three quarters, promoting the proportion of stock retail credit in interest bearing assets to increase by 1.5pct to 38.1% compared with the end of the previous quarter. In the whole year, new personal loans were mainly focused on personal business loans. The investment of personal housing loans was weakened due to the influence of regulatory policies, and the allocation of consumer loans was strengthened. Business loans, consumer loans and personal housing loans increased by 6.712 billion, 2.016 billion and 4.461 billion respectively, of which business loans and personal housing loans increased by 628 million and 2.905 billion respectively year-on-year, and consumer loans increased by 3.62 billion year-on-year.
The growth of deposits slowed down in the fourth quarter, and the proportion of market liabilities increased. At the end of 2021, the growth rates of the company’s total liabilities and deposits were + 15.4% and + 19.2% respectively, down 1.2 and 2.2pct respectively compared with the end of the previous quarter. Structurally, deposits, bonds payable and inter-bank liabilities accounted for 61.9%, 22.3% and 15.8% respectively, with changes of – 1.3%, 1.5 and – 0.1pct respectively compared with the end of 21q3. The growth rate of the company’s deposits slowed down in the fourth quarter, and the proportion of deposits decreased compared with the end of the previous quarter, but still increased by 1.2pct compared with the beginning of the year.
Strong margin resilience. In 2021, under the background of reducing fees and transferring profits and insufficient effective demand of the real economy, the asset side pricing of the company was under pressure. The rate of return on interest bearing assets in 2021 was 4.15%, down 8bp from the beginning of the year. On the liability side, the company hedged the downward pressure of interest margin by optimizing the liability structure. The cost ratio of interest bearing liabilities in 2021 was 2.63%, a decrease of 7bp compared with the beginning of the year. Thanks to the hedging of the downward pricing from the liability side to the asset side, the company’s interest margin remained strong and resilient during the reporting period. The interest margin in 2021 was 1.62%, down 3bp and 1bp respectively compared with 2020 and 1h21. The downward range of interest margin slowed down, and the decline was far lower than the average level of urban commercial banks.
The net fee and commission income achieved good performance, mainly supported by agency business and bank card business. In 2021, the company’s net fee and commission income increased by 14.8% year-on-year to 376 million yuan, mainly driven by the high growth of agency business and bank card business. Among them, the increase of bank card handling fee income was as high as 143.3%, which was mainly due to the company’s vigorous promotion of credit card business, and the relevant handling fees increased with the growth of business volume.
Asset quality improved quarter by quarter, and the core tier 1 capital adequacy ratio decreased quarter on quarter. In the fourth quarter of 2021, the quality of Xiamen Bank Co.Ltd(601187) assets continued to improve in the early stage. The non-performing loan ratio at the end of 2021 was 0.91%, with a quarter on quarter decrease of 1bp and remained below 1%; Overdue loans account for 99.8% of non-performing loans. The company strictly recognizes non-performing loans, and overdue loans are basically included in non-performing loans. In terms of provision, the company’s risk offsetting ability continued to maintain a high level, and the provision coverage rate was stable at about 370% at the end of 21, which was basically the same as that at the end of the previous quarter. In terms of capital adequacy ratio, by the end of 2021, Xiamen Bank Co.Ltd(601187) core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 10.47%, 11.77% and 16.40% respectively, with quarter on quarter changes of -0.09, -0.14 and 2.12pct respectively.
Earnings forecast, valuation and rating Xiamen Bank Co.Ltd(601187) is one of the most comprehensive urban commercial banks in Fujian Province. With the sustainable development of Haixi Economic Zone, the company’s business location advantages will be further highlighted. At the same time, the company has excellent asset quality and high provision coverage, which makes the company have strong risk offset ability. In the future, considering that the “steady growth” policy is expected to continue to be introduced to promote the realization of this year’s economic growth target, we raised the EPS forecast for 20222023 to 0.95 (up 3.3%) yuan / 1.08 (up 3.8%) yuan, increased the EPS forecast for 2024 to 1.20 yuan, and the current stock price corresponding to Pb valuation is 0.77/0.70/0.64 times, maintaining the “overweight” rating.
Risk tip: if the macro economy goes down more than expected, it may increase the potential risk of large risk exposure.
