\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
Event overview
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) release the annual report: in 2021, the operating revenue was 7.655 billion yuan (+ 16.31%, YoY), the operating profit was 2.705 billion yuan (+ 21.21%, YoY), and the net profit attributable to the parent company was 2.188 billion yuan (+ 21.34%, YoY); At the end of 2021, the total assets were 246583 billion yuan (+ 18.16%, yoy; + 2.12%, QoQ), deposits were 182732 billion yuan (+ 15.07%, yoy; + 0.79%, QoQ), and loans were 162797 billion yuan (+ 23.59%, yoy; + 0.30%, QoQ); 2021a net interest margin 3.06% (- 12bp, YoY); The non-performing loan ratio is 0.81% (-0bp, QoQ), the provision coverage ratio is 531.82% (+ 10.45pct, QoQ), the allocation loan ratio is 4.33% (+ 0.10pct, QoQ), and the capital adequacy ratio is 11.95% (+ 0.07pct, QoQ); Annual roe11 62%(+1.28pct，YoY)。 The proposed cash dividend is 0.2 yuan / share, and the disclosed dividend rate is 25.05%.
Analysis and judgment:
With strong revenue, the performance is beautiful, and the performance forecast for the first quarter of this year shows high growth
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) 2021 achieved a year-on-year revenue of + 16.3%, a continuous increase of 3.3pct compared with the first three quarters, and the growth rate increased quarter by quarter during the year. On the one hand, with the strong investment of small and micro loans, the credit scale continued to expand + the interest margin stabilized and rebounded, promoting the growth rate of net interest income to increase quarter by quarter, reaching + 24.6% in Q4; On the other hand, non interest income achieved a year-on-year high growth rate of 56.6%. In addition to the rapid increase in investment income in line with the industry trend, the medium income performed well, with a low base of 61% in the next year, a large jump compared with + 30% in the first three quarters in the fourth quarter. Among them, the handling fee income of agency business increased by 115.6% in the same period, which is the main contribution factor driving the medium income growth, reflecting the effectiveness of the company in strengthening the construction of wealth management system.
Compared with the less provision for impairment in 2020, the return of impairment provision in 2021 increased by 16.2% year-on-year. Thanks to the strong pull of revenue, the net profit attributable to the parent company achieved an annual growth rate of 21.3%, an increase of 2.3pct compared with q1-3, which is also the highest annual growth rate since 2017.
According to the operating conditions from January to February 2022 and the performance forecast of the first quarter disclosed by the company, from January to March Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) operating revenue was + 19% (+ 16.27%, 2021a; + 27.94%, 2022m1-2) year on year, and the net profit attributable to the parent company was + 23% (+ 21.13%, 2021a; + 25.64%, 2022m1-2) year on year. The overall growth rate was further improved compared with that of the whole year of 2021. Combined with the growth rate of assets, loans and deposits in February compared with that of the beginning of the year, + 8.07% / + 5.8% / + 11.56% respectively, Good credit supply is expected to be the main factor supporting the rapid growth of performance in the first quarter.
Retail loans made great efforts, and structural optimization contributed to the rise of loan yield, and the interest margin continued to rise during the year
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) 2021 net interest margin was 3.06%, a year-on-year decrease of 12bp, but the year-on-year ring ratio rebounded, 21q1 / 21h1 / 21q1-3 were 2.97% / 3.02% / 3.03% respectively. We believe that the stabilization and recovery of interest margin is mainly due to the optimization of asset side structure, including the increase in the proportion of asset side loans and the increase in the proportion of high interest retail loans in loans. In 2021, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) total assets were + 18.2% year-on-year, and the growth rates of deposits and loans were as high as 15.1% and 23.6% respectively. Under the impulse at the beginning of the year, the year-on-year growth rate was basically stable, and the net loan at the asset end increased 3PCT to 63.4% compared with 2020. The amount of bills in loans contracted, while the annual growth rates of public and retail loans were 17.8% / 32.3% respectively. The asset acquisition ability was outstanding. Retail loans accounted for 78% of the annual increment, driving the proportion to further increase by 2.3pct to 61% month on month (Q3). Especially in the fourth quarter, the amount of public loans contracted, and the loan increment was contributed by retail. Retail loans have blossomed in many places, and mortgages, business loans and credit cards have increased rapidly by more than 30%. Among them, the company continues to implement the policy idea of “being small and scattered”, the business has further sunk, the proportion of business loans has continued to increase, accounting for nearly 40% of the total loans at the end of the year, increased by 3PCT and 2pct on a month on month basis, and also contributed 87% of the increment of retail loans in the fourth quarter. The operation of the inclusive financial pilot zone also further accelerates the expansion of business in other places. In 2021, loans outside Changshu increased by + 35% year-on-year, which is expected to drive more incremental credit demand and open the space for loan delivery.
Under the investment of high-yield assets, the average yield of loans in Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) 2021 was 6.24%, up 2bp compared with the first half of the year, including the return on financial investment and interbank assets, which also rebounded slightly in the second half of the year, and the overall cost of hedging liabilities increased. Under the trend of regular deposits, the company recorded a deposit cost rate of 2.27% in 2021, which was 3bp higher than that in the first half of the year. However, on a year-on-year basis, due to the reform of deposit pricing mechanism, the long-term interest rate decreased, which was 6BP lower than that in 2020.
We believe that after the epidemic, the competitive pressure of Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) micro loan industry has eased. Thanks to the customer group advantage and sinking strategy, under good risk control, it is expected to achieve the stability of asset end pricing.
The asset quality is disturbed, but the generation of non-performing assets is very low, and the appropriation rate thickens the safety margin
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) year-end non-performing rate was 0.81%, unchanged Q3 month on month, 15bp lower than that at the beginning of the year, and the level of non-performing rate was in the forefront of the industry. Among them, the non-performing rate of corporate loans decreased 45bp to 0.96% and that of personal loans decreased by 0.77% compared with that in 2020. The year-on-year slight increase of 1bp is mainly due to the slight fluctuation of mortgage quality, but its non-performing rate of 0.23% is at an absolute low level. From the perspective of forward-looking indicators, the concerned loans rebounded slightly in the fourth quarter, but decreased both compared with the beginning of the year, accounting for only 0.89% at the end of the year. At the same time, the overdue rate decreased by 6BP to a low of 0.9% compared with the beginning and middle of the year. The deviation degree of overdue 90 + / non-performing has increased during the year, with 73.5% at the end of the year, up nearly 6pct year-on-year, but the recognition is still relatively strict. It is estimated that the annual NPL generation rate is only 0.36%, and the corresponding credit cost rate has also decreased to a low level of 0.63%, more than half of that in 2020. Under less adverse pressure, the year-end coverage rate further rose to 532%, up 46.5pct and 10.5pct on a month on month basis.
Investment advice
Overall, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) customer group has a clear positioning and strong asset delivery ability, especially the strong retail loan delivery dominated by business loans in the fourth quarter, which contributed to the double rise of volume and price on the asset side in 2021, combined with the strength of wealth management, promoted the rapid growth of medium income in the agency class, and accelerated the release of performance as a whole. At the same time, excellent risk control strength ensures the consistent stability of asset quality, and high provision improves the safety margin. Taking into account the expected results of the first quarter report, the repair of regional economy in the future, the in-depth promotion of non local exhibition industry, and the subsequent approved issuance and landing of 6 billion yuan of convertible bonds, will support the high growth of the company.
In view of the performance of the annual report, we slightly adjusted the forecast of the company’s revenue of 8.3/93/ – billion yuan in 22-24 years to 8.4/95/10.7 billion yuan, and the forecast of net profit attributable to the parent company of 2.4/28/ – billion yuan in 22-24 years to 2.6/32/37 billion yuan, with a corresponding growth rate of 20.7% / 19.9% / 18.0%; 22-24 years eps0 The forecast of 88 / 1.02 / – yuan is 0.96/1.16/1.36 yuan, corresponding to the closing price of 7.51 yuan / share on March 30, 2022. Pb is 0.91/0.82/0.74 times respectively, maintaining the “buy” rating of the company.
Risk tips
1. The risk that the future repair of the overall economy is less than expected and the credit cost increases significantly;
2. Major business risks of the company.
