\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 398 Industrial And Commercial Bank Of China Limited(601398) )
Industrial And Commercial Bank Of China Limited(601398) 2021 net profit 350.2 billion yuan, an increase of 10.2%. Scale, other non interest bearing and provision contribute to performance. Net interest income, net handling fee income and other non interest income increased by 6.8%, 1.4% and 13.7% year-on-year, and revenue and profit before provision increased by 6.8% and 5.5% year-on-year respectively. Total assets and loans increased by 5.5% and 11% over the beginning of the year, and deposits increased by 5.2%.
Industrial And Commercial Bank Of China Limited(601398) 2021 saw rapid profit growth, better than expected performance and better statement quality, reflecting ICBC’s strong operation and management ability as an industry leader and steady and positive business promotion. The contribution of the annual report mainly comes from the scale, non interest and provision. The highlights of the annual report: the net interest margin has stabilized, the year-on-year growth rate of handling fees has increased, the asset quality has improved and the stock provision has increased.
Improve profitability and capital level.
Roae was 12.15%, with a year-on-year increase of 0.2 percentage points, roaa was 1.02%, with a year-on-year increase of 2bp; RORWA1. 25%, up 4bp year-on-year. Tier 1 capital adequacy ratio was 13.94% and 114bp / 6602%, respectively.
Improved net interest margin, strong customer base and excellent asset liability control
The net interest margin announced was 2.11%, which was flat compared with the previous three quarters. Since this year, it has gradually decreased, narrowed, and then flat. The annual decline is also limited. It is estimated that the net interest margin in the fourth quarter is 2.11%, up 5bp from the third quarter.
Increase in handling fee growth
The net handling fee income increased by 1.4% year-on-year, and the handling fee in a single quarter in the fourth quarter increased by 5.8% year-on-year. In the third quarter, the growth of precious metals, crude oil and other businesses was under pressure due to regulatory control, and the growth recovered in the fourth quarter.
Improved asset quality and stock provision.
The non-performing rate was 1.42%, 10 bp lower than that in the third quarter, and the balance of non-performing loans was 5.75% lower than that in the third quarter. The overdue loan was 1.23%, a decrease of 10bp over the medium term. It is estimated that the annual cumulative bad debt generation is 0.54%, with a significant year-on-year decrease of 50bp. The provision coverage rate was 205.84%, an increase of 9 percentage points over the third quarter.
Valuation
The operation is steady and positive, the valuation is low, the dividend yield is 6.2%, and the value is prominent. We raised the company’s EPS to 1.05/1.13 yuan in 2022 / 2023. At present, the corresponding price to book ratio of the stock price is 0.51x/0.46x, 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.
