\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
Summary of annual report data: Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) in 2021, the net profit was 2.188 billion, with a year-on-year increase of 21.34%. Operating income increased by 16.31% year-on-year; The cost income ratio is 41.40%. At the end of the year, total assets increased by 18.16%, loans increased by 23.59% and deposits increased by 15.07% compared with the beginning of the year. The year-end non-performing rate was 0.81%, and the provision coverage rate was 532%. At the end of the year, the core tier 1 capital adequacy ratio was 10.21%.
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) adhere to the principle of small and downward customers, and stabilize and improve the interest margin; Under the expansion of different places, the contribution of very familiar areas increases. Benefiting from the regional economy, the company’s unique small and micro business playing method and strict risk control, the company’s asset quality advantage has been maintained. In our core recommendation portfolio, the company reiterates its optimism and focuses on recommendation.
Key points supporting rating
The single quarter profit in the fourth quarter of 2021 increased by 29% year-on-year, and the performance in the first quarter of 2022 maintained a high increase Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) the single quarter profit in the fourth quarter increased by 29.2% year-on-year, driving the annual net profit growth to 21.34% and the annual roe to 11.62% year-on-year compared with the first three quarters (+ 19.0%, YoY). The annual net interest income increased by 12.15% year-on-year and 24.6% year-on-year in the fourth quarter. The growth performance is expected to be in the forefront of listed banks, mainly benefiting from the improvement of interest margin. The annual revenue increased by 16.3% year-on-year, further improved compared with the first three quarters (+ 13.0%, YoY), driving the annual profit before provision increased by 18.3% year-on-year. The company announced that the revenue / net profit in the first quarter of 2022 is expected to increase by 19% / 23% year-on-year respectively, and continue to maintain a high growth trend. We believe that we benefit from the better credit demand in the region and the company’s outstanding market competitiveness.
The interest rate spread rebounded for two consecutive quarters, and the contribution from different places increased
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) in 2021, the interest margin decreased by 12bp year-on-year to 3.06%, but rose for two consecutive quarters, significantly improved compared with the first half of the year (3.02%) and the first three quarters (3.03%), which effectively alleviated the market’s concern about the company’s interest margin. Although the profit transfer of financial institutions and the sinking of large stock banks have had an impact on the asset side yield since 2020, the company has improved the interest margin performance through the downward deviation of customer group structure and the increase of the proportion of loans and retail loans. The rate of return on assets and loan in 2021 increased compared with the first half of the year. From the perspective of regional distribution, the contribution of regions outside Changshu to the company’s performance has increased. In 2021, the proportion of revenue, loans and deposits in very familiar areas increased by 5.93, 5.88 and 4.18 percentage points respectively to 70%, 69% and 36% compared with 2020.
Valuation
We adjusted the company’s forecast of EPS of 0.97/1.15 yuan in 2022 / 2023. At present, the corresponding share price of Pb in 2022 / 2023 is 0.96x/0.87x, maintaining the overweight rating.
Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Regulatory control exceeded expectations
