\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 939 China Construction Bank Corporation(601939) )
Summary of the event: China Construction Bank Corporation(601939) disclosed the annual report. In 2021, the operating revenue was 824.2 billion yuan (+ 9.05%, YoY), and the net profit attributable to the parent company was 302.5 billion yuan (+ 11.61%, YoY); At the end of the year, the total assets of the bank were RMB 202303 billion (+ 1.02 billion + 1.87 billion; yoy + 1.02 billion; yoy + 1.8 billion; yoy + 3.05 billion; yoy + 1.87 billion; yoy + 1.8 billion; yoy + 0.87 billion; yoy + 1.02 billion). Net interest margin 2.13% (-6bp, YoY); The non-performing loan ratio is 1.42% (-9bp, QoQ), and the provision coverage ratio is 239.96% (+ 11.41pct, QoQ). The proposed cash dividend is 0.364 yuan / share, and the estimated cash dividend rate is 30.5%.
Analysis and judgment:
The three strategies are advanced in depth to cultivate new growth advantages
Relying on its early inherent advantages in the field of mortgage and infrastructure, CCB continued to cultivate new growth poles in line with national policy guidance, including promoting the “retail priority” strategy in 2017 and further adjusting and implementing the three strategies of “Housing leasing, Inclusive Finance and financial technology” in 2018. On the basis of the business card of housing finance, leasing loans, credit cards Multi-point layout in Inclusive Finance and other fields: it has a broad customer base and a steady expansion of customer volume, with 726 million retail customers; The number of credit card customers is 105 million, with a total of 147 million cards issued; Housing rental loans contributed more than 60% of the year-on-year high growth rate; Pratt Whitney small and micro loans increased in volume and quality, with an annual increase of 31.6%. With the implementation of the retail priority strategy, personal banking contributed 56.7% of the total pre tax profit, more than half of the country.
The profitability is ahead of big banks, and the performance of 2021a ranks a new high in recent years
Profit: the roe in 2021 was 12.55%, ranking first in the bank for a long time. The annual revenue was + 9% year-on-year, of which the net interest income and the net handling fee income were + 5.1% / + 6% year-on-year respectively. The growth rate of Q4 in a single quarter further increased slightly month on month. Other non interest income accounted for a low proportion, but contributed to a high growth rate of 49% year-on-year. Among the fee income, agency, financial management and custody business are the main supporting parts. Based on the excellent asset quality, the provision for impairment was reduced by 11.2% year-on-year, superimposed with the tax deduction in the fourth quarter, and the contribution to the parent company’s net profit was + 11.6% year-on-year. Overall, the revenue of the whole year is steadily rising, and the profit release is accelerated.
Negative assets: the total assets exceeded 30 trillion yuan by + 7.5% year-on-year, and the year-on-year growth rate of scale in each quarter of the year was basically stable. The negative asset structure was further concentrated on deposits and loans. Deposits and loans in the whole year were + 8.6% and + 12.1% respectively year-on-year, driving the proportion to rise to 81% and 60%. Although the proportion of current deposits decreased slightly, it still maintained 53% at the end of the year, contributing to the cost advantage and creating a stable asset investment style. On the one hand, it is necessary to invest in capital construction for the princess, on the other hand, more than 80% of retail investment is stably invested in mortgage, and at the same time, it is also necessary to increase the investment of large, small and micro business loans. The investment of retail loans has been repaired in the second half of the year, promoting the stable recovery of interest margin during the year.
Quality: the identification of defects is extremely cautious, and overdue 90 + / defects and overdue / defects remain low for a long time; The non-performing rate was 1.42%, down 14bp and 9bp respectively on a month on month basis. The improvement range widened in the fourth quarter. It is estimated that the non-performing rate has dropped by more than 30bp from the relative high in 2020, and the forward-looking indicators have also been comprehensively improved. The overall non-performing rate of individual loans is only 0.4%. The structural risks that need to be paid attention to mainly come from the real estate field, but the disturbance is expected to be small. The provision coverage rate naturally increased to 240%, and the risk offset capacity was consolidated.
Investment advice
Looking forward to 2022, the economy is in the post epidemic repair stage. The credit data at the beginning of the year reflect that the demand for physical financing is weak and shows obvious differentiation. Under the demand for stable growth of policies, the customer base and channel advantages of big banks are more prominent. Therefore, from 2022 to 2024, our main assumptions are as follows: 1) under the downward pressure of industrial interest margin, the company’s debt cost advantage is significant, the asset negative structure continues to optimize hedging, and the net interest margin is expected to be basically stable; 2) In 2022, the overall growth rate of total asset scale will maintain about 9%; 3) On the basis of continuous clearing of non-performing assets, the credit cost rate remains low, which is expected to be about 0.9% in 2022, contributing to higher performance release space. Based on the above assumptions, we estimate that the operating revenue of the company from 2022 to 2024 will be 8708 / 9538 / 1044.7 billion yuan respectively, with a year-on-year increase of 5.6% / 9.5% / 9.5%; The net profit attributable to the parent company was 324.2/351.0/386.3 billion yuan respectively, with a year-on-year increase of 7.2% / 8.3% / 10.1%; EPS is expected to be 1.28/1.39/1.53 yuan respectively, corresponding to the closing price of 6.35 yuan / share on April 6, 2022, Pb is 0.59/0.54/0.49 times respectively, and the valuation is at an absolute low level. Considering that the company’s overall fundamentals are stable, multiple business areas maintain scale advantages, high profitability is sustainable, the transformation is deepened, and the enabling performance flexibility is promoted, we give the company a “buy” rating for the first time.
Risk tips
1) the risk that the future economic recovery is less than expected and the credit cost continues to rise significantly;
2) major risks at the operation level of the company.
