\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
Year on year growth of operating profit: ; The cost income ratio is 36.95%. Total assets increased by 23.9%, loans increased by 25.5% and deposits increased by 13.8%. The year-end non-performing rate is 0.77%, the provision coverage is 526%, and the core tier 1 / capital adequacy ratio is 10.16% / 15.44%. Roe increased by 1.73 percentage points year-on-year to 16.63%.
The company’s performance remains excellent. We believe that excellent management, market-oriented gene and flexible mechanism ensure the excellent fundamentals and sustainable growth of the company, which is also the core of Bank Of Ningbo Co.Ltd(002142) valuation premium given by the market and continues to look good.
Key points supporting rating
Excellent performance, non interest and bright eyes
Bank Of Ningbo Co.Ltd(002142) 2021 revenue and profit growth were both high, with year-on-year growth of 28.4% and 29.9% respectively. The handling fee performance was beautiful, and the annual revenue increased by 30.3% year-on-year. Among them, the revenue of agency business increased by 33% year-on-year. We believe that thanks to the promotion of the company’s wealth management, retail AUM increased by 23% year-on-year in 2021. Net interest income increased by 17.4% year-on-year, maintaining a relatively good level of listed banks. In 2021, non interest income accounted for 38.0% of revenue, and handling fee income accounted for 15.7% of revenue.
High growth in scale and strong demand for credit
Bank Of Ningbo Co.Ltd(002142) 2021: the scale maintained a high growth, with assets increasing by 23.9% and loans increasing by 25.5% compared with the beginning of the year, reflecting strong credit demand. In terms of loan details, retail loans, corporate loans and bill discounting increased by 27.3%, 25.6% and 15.9% respectively over the beginning of the year.
Asset quality remained ahead of listed banks and continued to strengthen the ability to resist risks of on balance sheet and off balance sheet assets
The non-performing rate at the end of 2021 decreased 2bp to 0.77% compared with the beginning of the year, maintaining a low level; The provision coverage rate is 526%, keeping the lead. The company consolidated the risk resistance of assets on and off balance sheet, and the loan loss increased by 26.2% in 2021; Non credit losses increased by 171%, of which off balance sheet business losses increased by 11.8%.
Valuation
Considering the support of the company’s core capital supplement for business expansion, EPS in 2022 / 2023 was raised to 3.59/4.33 yuan (formerly 3.57/4.13 yuan). At present, the stock price corresponds to the price to book ratio of 1.65x and 1.42x in 2022 / 2023. The company’s excellent performance and fundamentals support the valuation premium and maintain the buy rating.
Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Regulatory control exceeded expectations.
