\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
Event: on March 30, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the annual report of 2021. The annual revenue / profit before provision / net profit attributable to parent company reached 7.655 billion, 4.443 billion and 2.188 billion, with a year-on-year increase of 16.3% / 19.2% / 21.3% respectively. ROA and roe were 1.03% and 11.62% respectively, with a year-on-year increase of 0.05 and 1.28pct. The comments are as follows: the scale expanded rapidly, the net interest margin continued to rise, and the operating revenue and net profit maintained rapid growth. In 2021, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) revenue and net profit increased by 16.3% and 21.3% respectively year-on-year, a new high since 2017. The continuous recovery of profits is mainly due to: 1) the rapid expansion of credit scale. By the end of the year, the loan balance had increased by 23.6% year-on-year, and the growth rate is expected to be higher than that of comparable peers. 2) Under the new method of “small and scattered” asset allocation, the asset structure continued to be optimized and the net interest margin gradually stabilized. 1q21 1h21 3q21 2021 net interest margin was 2.97%, 3.02%, 3.03% and 3.06% respectively, continuing the upward trend. In addition, since the beginning of the year, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) has maintained a relatively fast credit extension speed, with bright business data. The first quarter performance forecast shows that 1q22 revenue and net profit increased by 19% and 23% respectively year-on-year, further accelerating compared with 21 years.
The asset structure was optimized, the loan pricing was improved, and the return on assets resumed upward. Facing the downward trend of loan pricing in the industry and the pressure of narrowing the net interest margin, the company actively adjusted its asset manipulation strategy to deal with it. On the one hand, we should optimize the asset structure, increase credit supply and accelerate the transformation of retail banks. The average balance of loans accounted for 68.49% of the average balance of total assets in 21 years, with a year-on-year increase of 2.51pct; The average balance of personal loans accounted for 57.41% of the average balance of total loans, an increase of 3.31 PCT year-on-year. On the other hand, sink the customer base and promote the “small and scattered” focus of assets. In the face of fierce competition in the small and micro market, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) gradually sank to areas with relatively insufficient financial supply, and achieved higher loan pricing on the basis of strict risk control. In addition, the release pressure of inclusive small and micro loans from big banks eased in the second half of the year, which also helped to improve the pricing of Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) small and micro loans. In 2021, the return rates of loans and interest bearing assets were 6.24% and 5.25% respectively, which increased by 2bp and 8bp compared with 1h21, and the return rate of assets resumed upward. Under the strategy of “retail bank” transformation and “small and scattered”, it is expected that the net interest margin this year is expected to maintain a better level and become one of the important supports for revenue growth.
The asset quality remains excellent, the provision is sufficient and the profit release can be expected. By the end of the 21st century, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) NPL ratio was 0.81%, down 15bp from the end of the previous year, unchanged from the end of the third quarter, and the asset quality remained excellent. From the perspective of forward-looking indicators, the loan balance of concern was 1.444 billion, a decrease of 102 million compared with the end of the previous year, and the loan ratio of concern decreased by 28bp to 0.89% compared with the end of the previous year; The overdue loan ratio decreased by 7bp to 0.90% compared with the end of last year, and the potential non-performing pressure in the future is small. At the end of the year, the provision coverage rate was 531.82%, an increase of 46.5pct compared with the end of the previous year Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) excellent asset quality reflects its mature microenterprise model and excellent risk control ability. It is expected that the asset quality of the company will maintain a stable and positive trend. On this basis, the necessity of further improving the provision coverage is reduced; The credit cost is expected to decline in the future, which will contribute to the release of potential profits and the improvement of roe center.
Adhere to the characteristic and differentiated development path of small and micro enterprises, and open up growth space for remote replication Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) is positioned to serve agriculture, rural areas and farmers, small enterprises and small and micro enterprises, and has formed a mature small and micro model of “IPC technology + credit factory”. The front end uses IPC technology before loan investigation and cross validation. The back-end adopts standardized and industrialized approval process and strict risk control to achieve a high income level Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) microenterprise model has strong professionalism, systematicness and replicability. In recent years, the company has replicated the small and micro model in remote branches and rural banks, and the effectiveness of remote strategy has gradually emerged; In 2021, the loan contribution and revenue contribution of non local markets have increased to 69% and 70%. The four newly established inclusive finance pilot zones last year are expected to bring more incremental demand.
Investment suggestions: Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) adhere to the development path of small and micro enterprises with characteristics and differentiation, and deeply cultivate the local market; At the same time, by expanding business space through remote branches and rural banks, the credit scale is expected to maintain rapid growth. Small and micro businesses have distinctive characteristics and mature models. At the same time, they sink the customer base, become small and scattered, have strong loan bargaining power, and the net interest margin is in a leading position among comparable rural commercial banks. The asset quality remains excellent, the provision is sufficient, and the counter replenishment profit space is large. It is estimated that the growth rate of net profit from 2022 to 2024 will be 22.6%, 20.3% and 19.1%. The corresponding BVPs are 8.21, 9.40 and 10.81 yuan / share respectively. Considering the valuation center and fundamentals of the company in recent two years, the company is given 1.2 times of the 2022 Pb target valuation, corresponding to the target price of 9.85 yuan / share, maintaining the “strongly recommended” rating.
Risk tip: the economic stall and downturn lead to the deterioration of asset quality; Unexpected changes in regulatory policies, etc.
