\u3000\u30006 Shenwan Hongyuan Group Co.Ltd(000166) 00016)
Promote the business to return to its original source, and the year-on-year growth rate of net profit attributable to the parent company became positive.
The company disclosed in the 2021 annual report that the annual revenue and net profit attributable to the parent decreased by 8.73% year-on-year, increased by 0.21%, and the year-on-year growth rate increased by 0.12pct and 5.14pct compared with the first three quarters. The year-on-year growth rate of revenue stabilized, and the year-on-year growth rate of net profit attributable to the parent returned to positive. The company promoted the return of business to its original source, took the initiative to significantly reduce non-standard investment, and the daily average scale of non-standard investment such as trust and asset management plans and financial products shrank, laying the foundation for long-term growth.
The credit structure was further optimized and the growth of core liabilities was strengthened
In 2021, the company’s net interest margin was 1.91%, with a year-on-year decrease of 1bp compared with the first three quarters. The decline in the company’s net interest margin is mainly due to 1) implementing the national policy of reducing fees and transferring profits, and increasing credit in key areas such as manufacturing, green credit, Rural Revitalization and Inclusive Finance; 2) Actively optimize the credit structure, improve the credit supply to strategic customers and high rated customers, and reduce the scale of real estate development loans with relatively high income level; 3) The company’s small, medium and micro loans account for a large proportion and continue to increase the investment. However, the duration of small and micro loans is short and the repricing is fast. The reduction of LPR has an impact on the loan yield. On the whole, the credit business structure has been optimized, the asset quality has been consolidated, and the comprehensive pricing management of long-term customers has been strengthened. In 2021, the company increased lending in key areas. At the end of the year, the balance of green credit increased by 103.76% year-on-year, the balance of medium and long-term loans in manufacturing increased by 13.98% year-on-year, and the balance of loans for inclusive small and micro enterprises increased by 12.59% year-on-year, both of which were higher than the average level of the whole bank.
The company actively adjusted and optimized the debt structure and reasonably controlled the debt cost. In 2021, the total amount of deposits absorbed increased by 1.28% year-on-year, the structural deposits were significantly compressed, the average daily balance of core liabilities increased by 15.97% year-on-year, the deposit cost rate was 2.18%, down 8bp year-on-year, and the deposit cost decreased for two consecutive years.
Asset quality improved steadily, and the risk exposure of real estate business decreased
In 2021, the NPL generation rate was 2.26%, with a year-on-year decrease of 1.37pct, and the asset quality maintained a steady improvement trend. The defect rate at the end of 21q4 was 1.79%, which was the same as that at the end of 21q3; The proportion of concerned loans decreased by 34bp compared with that at the end of 21q3; The provision coverage rate reached 145.30%, which remained relatively stable at the end of 21q3.
In addition, at the end of 2021, the balance of the company’s public real estate business decreased by 19.81% year-on-year, and the balance of real estate related net worth wealth management, entrusted loans, consignment trusts actively managed by cooperative institutions, lead underwriting debt financing instruments and other businesses decreased by 23.59% year-on-year. The risk exposure of real estate related businesses contracted significantly.
Investment suggestion: consolidate the capital and cultivate the yuan, so as to lay a foundation for improving the long-term growth capacity
The strategic objectives of the company are clear, focusing on the three major tasks of “serving the real economy, preventing and controlling financial risks and deepening financial reform”. The plan is clear in two steps from 2021 to 2025. 20212022 is the year to consolidate the foundation of the company, and realize the transformation of growth mode by laying a foundation and consolidating the source. Early adjustment will enhance the initiative of future development and make the future operation more stable and sustainable. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will increase by 4.70%, 10.27% and 9.55% year-on-year. As of the closing on March 29, the company’s Pb (LF) was 0.35 times, giving the 2022 target pb0.35 times 4 times, corresponding to the target price of 4.67 yuan, maintaining the “overweight” rating.
