\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 658 Postal Savings Bank Of China Co.Ltd(601658) )
Event: on March 30, Postal Savings Bank Of China Co.Ltd(601658) disclosed the annual report of 2021: net profit attributable to parent company + 18.65% (first three quarters + 22.07%); Operating revenue + 11.38% year-on-year (the first three quarters + 10.22%). Annual weighted roe11 86%, year-on-year + 2bp.
Large banks with high performance and outstanding growth
The company has remarkable characteristics of high growth. By 2021, the year-on-year growth rate of the company’s performance has ranked first among the six major state-owned banks for eight consecutive years; The average annual compound growth rate of performance in the past two years is as high as 11.81%. It is the only bank with double-digit average annual compound growth rate among the six major state-owned banks, with the growth rate 4.31pct higher than the second. The outstanding performance of the company in 2021 is mainly due to the back feeding of provisions and scale expansion. Secondly, the accelerated growth of non interest income has also brought positive contributions.
The net interest margin remained resilient and the asset negative structure continued to be optimized
The annual net interest margin was 2.36%, a slight decrease of 1bp compared with the first three quarters and 21h1, and continued to maintain the leading level in the industry. Among them, the rate of return on interest bearing assets and the cost rate of interest bearing liabilities were slightly lower than 21h1 by 1bp and basically flat. The company continued to optimize the asset liability structure to hedge the downward pressure of industrial interest margin. On the asset side, the company increased its lending efforts, and the proportion of the average size of 21h2 loans in interest bearing assets increased by 1.37pct compared with H1. On the liability side, the company increased deposit absorption through agency outlets, and the proportion of personal deposits increased by 44bp compared with the end of Q3. It is worth mentioning that the proportion of the company’s one-year and below deposits has increased, and the pressure drop of long-term high-cost deposits is obvious. Taking into account the company’s strong storage capacity and will continue to deepen retail transformation and optimize asset liability structure in the future, we believe that its net interest margin is expected to continue to maintain an advantageous level.
Accelerate the upgrading of financial management and make rapid progress in empowerment and revenue
In 2021, net non interest income increased by 50.44% year-on-year, with a significant increase of 14.75pct compared with the first three quarters. Among them, the net income from handling fees and commissions was + 33.42% year-on-year, continuing the previous high-speed growth trend. The outstanding performance of Zhongshou was mainly due to the fact that the agency service fee income was + 88.67% year-on-year driven by the transformation and upgrading of wealth management. Focusing on the two key capacity-building of customer relationship management and asset allocation, the company comprehensively upgraded the “front office team capacity, middle office product capacity, investment and research capacity and back office science and technology capacity”, and achieved remarkable results in transformation and upgrading. By the end of 2021, VIP customers had a year-on-year increase of + 17.07%, fortune customers had a year-on-year increase of + 24.12%, and the total scale of AUM reached 12.53 trillion yuan, a year-on-year increase of + 11.40%.
The asset quality advantage position is stable and the ability to resist risks is strong
The company has always maintained a steady and prudent credit supply style, with small exposure to housing related loans and long-term leading overall asset quality. At the end of 2021, the non-performing rate was 0.82%, unchanged month on month; The attention rate was 0.47%, with a chain ratio of + 2bp; The overdue rate was flat at 0.89% month on month, both at the low level of listed banks. The provision coverage rate was 418.61%, with a slight decrease of 4.09pct month on month, strong risk resistance and abundant profit space.
Investment suggestion: the transformation effect can be expected, and the “buy” rating shall be maintained
The company adheres to the strategic positioning of large retail banks and seizes the strategic opportunity period of residents’ wealth management growth. With 637 million individual customers and nearly 40000 outlets, the company has unique resource endowment in wealth management, especially benefiting from the dividend of common prosperity policy. We expect the company’s performance growth rate to transition smoothly from 2022 to 2023, adjusted from 11.5% / 12.3% to 13.3% / 14.8% respectively, and give it a target valuation of 0.9 times Pb in 2022, corresponding to the target price of 6.79 yuan / share, maintaining the “buy” rating.
Risk tip: the economy is going down faster than expected, the monetary policy is not as expected, and the asset quality is significantly deteriorated.
