\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 939 China Construction Bank Corporation(601939) )
Event: on March 29, China Construction Bank Corporation(601939) released the annual report for 2021, with operating revenue + 9.0% and net profit attributable to parent company + 11.6% year on year; Total assets + 7.5% year-on-year; Net interest margin 2.13%, year-on-year -6bp; The non-performing loan ratio was 1.41%, year-on-year – 14bp, and the provision coverage ratio was 239.5%, year-on-year + 26.3pct.
The annual performance remained high. In terms of revenue split, the net interest income in 2021 stabilized the basic market, with a year-on-year increase of + 5.1%, 0.2pct higher than that in 21q3. The growth rate of net handling fee income was “high before low”, and the performance of other non interest income was eye-catching, with a year-on-year increase of + 48.9%. In terms of profit split, in addition to scale expansion and other non interest income, the back feeding effect of provisions on profits was also significantly enhanced, mainly due to the year-on-year provision for credit impairment losses of – 13.2%, indicating the positive trend of asset quality of the company.
New finance promotes high-quality development. The “three strategies” continue to lead. The balance of housing rental loans in 2021 is + 60% year-on-year. As one of the important starting points of real estate wide credit, the company is expected to fully enjoy the new growth space brought by the policy dividend; Continue to build a digital inclusive financial model, with inclusive financial loans + 31.6% year-on-year; Release the financial technology strategic plan (20212025) to enable the high-quality development of new finance. The “second development curve” outlines a high-quality development blueprint. The company’s strategic emerging industry loans increased by + 50% year-on-year, much higher than the average growth rate of loans.
The net interest margin stabilized. The improvement of asset structure helped to stop the decline of net interest margin. In 2021, the company’s asset expansion further returned to loans, with the loan balance + 11.3% year-on-year, leading the interest bearing assets by 2.9pct, boosting the stability of the yield of interest bearing assets, driving the net interest margin of the company to be flat with 21h1 at the end of 2021, and stopping the continuous downward trend since 2019.
Asset quality has improved significantly. By the end of 2021, the company’s non-performing loan ratio was 1.41%, with a month on month ratio of – 10bp, which has returned to the pre epidemic level. Among them, the non-performing loan ratio of corporate loans decreased significantly by 24bp year on year, which is the core force for the improvement of the company’s asset quality and drives the provision coverage ratio to + 11.4pct month on month, further thickening the asset safety margin. From the perspective of non-performing leading indicators, the proportion of concerned and overdue assets decreased by 26bp and 15bp year-on-year, indicating that the asset quality has been substantially improved and the positive trend is clear.
Investment suggestions: the performance is booming, the net interest margin stabilizes, and the asset quality improves
The performance remained high, the new finance helped high-quality development, the net interest margin stabilized, and the asset quality improved significantly. It is estimated that the EPS of 22-24 years will be 1.36 yuan, 1.52 yuan and 1.72 yuan respectively. The closing price on March 30, 2022 corresponds to 0.6 times of the 22-year Pb, which is lower than the average value of comparable companies. It will be covered for the first time and given a “recommended” rating.
Risk tip: macroeconomic growth rate declines; Strategic transformation is less than expected; Capital replenishment is under pressure.
