\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 288 Agricultural Bank Of China Limited(601288) )
Agricultural Bank Of China Limited(601288) 2021 net profit of 241.2 billion yuan, an increase of 11.7%. The performance growth mainly comes from the contribution of scale, non interest and provision. Among them, the net interest income increased by 6.0%, the net fee income increased by 7.8%, the non interest income increased by 25.7% and the operating income increased by 9.4% year-on-year; At the end of the year, total assets increased by 6.9%, loans increased by 13.2% and deposits increased by 7.5%. The year-end non-performing rate was 1.43%, the provision coverage rate was 293.17%, and the core tier 1 capital adequacy ratio was 11.44%. ABC’s performance grew rapidly and its profitability improved year-on-year.
Agricultural Bank Of China Limited(601288) 2021 annual report performance continued to grow rapidly. The year-on-year growth of performance mainly comes from the rapid growth of scale and medium income, and the less provision of incremental provisions driven by the improvement of asset quality. The highlights of the report are excellent in terms of net interest margin, handling charges and asset quality: the net interest margin was stable in the fourth quarter, the handling charge income grew relatively fast in the same quarter, and the growth contribution of major e-banking and wealth related businesses. The asset quality has improved, the stock provision index has increased, and the risk defense ability has continued to improve. The proportion of loans and income of the company’s characteristic county business continued to increase, and its advantages continued to expand.
Key points supporting rating
The increment and proportion of county business reached a record high
By the end of 2021, the loan balance of Agricultural Bank Of China Limited(601288) county was 6.2 trillion yuan, accounting for 36%, an increase of 913 billion yuan over the end of the previous year, with a growth rate of 17.2%. The increment and proportion of county loans reached a new high since the share reform. County business revenue accounted for 40.8%, up 1.2 percentage points year-on-year. The balance of Huinong e-loans was 544.7 billion yuan, an increase of 191.3 billion yuan over the end of the previous year, and the number of credit households was 3.68 million, an increase of 920000 over the end of the previous year. The county non-performing loan rate was 1.42%, down 8bp from the third quarter, and the provision coverage rate was 332.10%, up 15 percentage points from the third quarter. The average yield of loans is 4.45%, which is 2 bp lower than that in the medium term, and the deposit cost is 1.55%, which is 1 bp higher than that in the medium term. The county asset quality, provision and deposit loan interest margin continued to be better than the overall level of the company.
Valuation
The company’s county-level business of agriculture, rural areas and farmers continued to expand actively, with a good customer base and high provision level. We raised the company’s EPS to 0.75/0.81 yuan in 2022 / 2023. At present, the stock price corresponds to 0.47/0.41 times of Pb in 2022 / 2023, maintaining the overweight rating.
Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Financial regulation exceeded expectations.
