\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 398 Industrial And Commercial Bank Of China Limited(601398) )
Core view
The growth rate of net profit attributable to parent company reached the highest level in recent eight years. In 2021, the operating revenue reached 942.8 billion yuan, a year-on-year increase of 6.8%, which was basically the same as that in the first three quarters; The annual PPOP increased by 5.5% year-on-year; The annual net profit attributable to the parent company was 348.3 billion yuan, with a year-on-year increase of 10.3%. The annual net profit attributable to the parent company increased by an average of 5.6% in two years, up 5.6 percentage points from the first three quarters. The average growth rate of the net profit attributable to the parent company hit the highest since 2013. 2021 weighted roe12 2%, an increase of 0.3 percentage points year-on-year.
The asset growth rate is slightly lower than the industry average. In 2021, the total assets increased by 5.5% year-on-year to 35.17 trillion yuan, lower than the overall level of the industry. Among them, deposits increased by 5.2% year-on-year to 26.44 trillion yuan, and loans increased by 11.0% year-on-year to 20.67 trillion yuan; At the end of the year, the core tier 1 capital adequacy ratio was 13.18%, much higher than the regulatory standard.
The net interest margin bottomed out and stabilized at the bottom. The company’s annual average daily net interest margin was 2.11%, a year-on-year decrease of 4bps, mainly due to a slight decrease in loan yield and strong deposit cost. However, the company’s net interest margin has stabilized significantly since the interim report. Among them, the annual loan yield decreased by 10bps year-on-year, and the deposit interest payment rate increased by 1bps.
The net income from handling charges increased slightly. In 2021, the net fee income increased by 1.4% year-on-year, mainly because the company adhered to the business transformation and implemented the policy of reducing fees and transferring profits, and the business income from bank cards, corporate finance, guarantees and commitments decreased.
Asset quality remained stable. The estimated NPL generation rate in 2021 is 0.54%, a year-on-year decrease of 50bps. The NPL generation rate of the company is very low, and the margin is still improving, highlighting the robustness of going abroad. The company’s provision coverage at the end of the year reached 206%, an increase of 9 percentage points over the end of the third quarter and 25 percentage points over the beginning of the year. In addition, the non-performing rate of the company at the end of the year was 1.42%, a decrease of 10bps compared with the end of the third quarter; The attention rate was 1.99%, slightly higher than that of the interim report, but 22bps lower than that at the beginning of the year; The non-performing / overdue rate is 115%, which is the same as that in the interim report, and the non-performing provision standard is relatively strict.
Investment suggestion: we slightly adjust the profit forecast according to the information in the annual report. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 366.9/386.2/406.9 billion yuan, with a year-on-year growth rate of 5.3/5.3/5.3%; Diluted EPS is 0.91/0.97/1.03 yuan; The current share price corresponds to PE of 4.9/4.7/4.4x and Pb of 0.51/0.48/0.44x, maintaining the “buy” rating.
Risk tip: the weakening macroeconomic situation may have an adverse impact on the quality of bank assets.
