\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
Performance: sustained “high growth”, and the growth rate of PPOP increased to 30% + quarter by quarter. The revenue growth rate in 2021 was 28.4%, basically the same as that in the first three quarters; PPOP and profit growth continued to increase by 2pc and 3pc to 30.7% and 29.9%, the highest among the listed banks that have disclosed their annual reports. Specifically:
1. The annual interest rate spread has decreased in 21 years and will remain flat in 22 years. The interest rate of loans decreased by 21.8bps compared with that of the first three quarters, but the net interest rate decreased by 21.8bps compared with that of the first three quarters; 2) Under the increasing competitive pressure on the liability side, its deposit cost rate (1.83%) increased slightly by 1bp compared with 21h. According to the outlook for 22 years in the annual report, although there is still downward pressure on the interest margin, Bank Of Ningbo Co.Ltd(002142) will strive to keep the interest margin flat with that in 2021 through asset structure optimization and strengthening liability control.
2. Non interest income increased by 51%, of which: 1) the net income from handling fees and commissions increased by 30.3%, with an average annual growth rate of 30% in the past three years, and the proportion in revenue further increased by 0.23pc to 15.7% compared with the end of the 20th year, mainly due to the high growth of wealth management businesses such as consignment and wealth management, the income from agents increased by 33.1% to 7.84 billion, and the proportion in handling fee income increased to 83.2% (including wealth management income of 2.58 billion, double year-on-year). 2) Other non interest income increased by 4.9 billion year-on-year, of which investment income increased by 3.35 billion year-on-year, mainly due to the increase of 2.83 billion in dividend income such as fund investment in trading assets. According to the outlook of the annual report for 22 years, Bank Of Ningbo Co.Ltd(002142) it is expected that wealth management, international settlement, financial market agency business and other profit center businesses will continue to develop rapidly, and the revenue contribution will further appear.
3. The cost income ratio (36.95%) is slightly higher than that in the first three quarters, or it is a seasonal factor (Q4 pays bonuses intensively, and Bank Of Ningbo Co.Ltd(002142) starts well earlier, resulting in an increase in relevant expenses). Compared with 2020 (37.96%), it has decreased by about 1pc. The recruitment of personnel in 21 years has been basically in place, with a total of 24000 employees, which is basically the same as that in 20 years, including 7003 in retail lines, a decrease of 906. The focus has changed from “enrollment expansion” to increasing training, improving quality and expanding production capacity. In addition to continuously promoting the upgrading of financial technology, it is expected that the input-output ratio of employees will continue to increase in Bank Of Ningbo Co.Ltd(002142) 22, and the cost income ratio is expected to continue to decline.
Business: wealth management “made great progress” and 15 profit centers “blossomed in an all-round way”.
1. “Steady expansion” of deposit and loan business. 1) Asset side: at the end of the year, the total asset scale exceeded 2 trillion, with a year-on-year increase of 23.9%, of which the net loan was 832.4 billion, with a year-on-year increase of 25.5%. Among the 66.9 billion new loans in the second half of the year: A. notes increased by only 2.5 billion; B. 24 billion was invested in retail, of which consumer loans increased by 21.4 billion and mortgages increased by 3.3 billion (accounting for a low level of 4.3%); C. 40.4 billion yuan was invested in the public sector, mainly increasing the investment of manufacturing loans. In addition, in the 21st year, the investment assets were mainly allocated with government bonds and funds, increasing by 152.2 billion, 39.1 billion to 450.8 billion and 227 billion respectively; 2) Liability side: the total deposit was 1.06 trillion yuan, a steady increase of 0.5% over the end of September and a year-on-year increase of 13.8%. At the end of the year, the proportion of demand deposits decreased compared with 21h, which was mainly disturbed by time point factors. From the perspective of daily average balance, the proportion of demand deposits (44.3%) was basically the same as that of 21h (44.5%).
2. Wealth management “advances by leaps and bounds”. In 2021, with the increase of market volatility, AUM steadily increased by 22.9% to 656.2 billion, including 213.9 billion (+ 6.2%) deposits and 332.3 billion (+ 16.5%) wealth management. It is estimated that the number of funds is about 100 billion (estimated + 30%). The growth of high net worth customers was even brighter. The number of private customers increased by 70% to 13000, and the Aum of private banks increased by 53.1% to 146.4 billion. In 2022 Bank Of Ningbo Co.Ltd(002142) will further deepen the big wealth system, do a good job in the hierarchical operation of customers, strengthen the professionalism of front, middle and back offices, enrich the product system, and enable financial technology to upgrade the user experience, so as to further promote the rapid development of wealth management business.
3. All profit centers “let a hundred flowers bloom”, and most of the key business indicators have increased by more than 25%.
1) corporate and investment banks: the total number of corporate customers increased by 17% to 117200. While 94.6 billion new corporate loans were added throughout the year, the total amount of customer financing (FPA) reached 605.9 billion yuan through comprehensive financial services, including 375.9 billion corporate bond instruments (the top 10 in China). In addition, in the investment banking business, the underwriting volume of CDB bonds and treasury bonds ranked first and sixth in the market respectively.
2) retail companies: the number of customers exceeds 370000, the year-end loan balance is 144.9 billion (year-on-year + 33.5%), and the deposit is 139.2 billion (+ 19.2%).
3) asset custody business: the custody scale reached 3.95 trillion yuan (year-on-year + 65%), and there were 644 custody cooperative customers (+ 9%). In addition, it was officially approved as QFII trusteeship qualification in 21 years and released the industry’s first exclusive service platform for outsourcing customers (easy outsourcing 2021 version). The scale of outsourcing business was 415.7 billion yuan, becoming a new business growth point.
4) other businesses are also growing rapidly, such as:
A. the credit card business increased platform cooperation and user expansion, and the number of cards issued was 3.72 million (year-on-year + 27%);
B. YONGYING financial leasing, as a national license, will accelerate its expansion in 2021. At the end of the year, the asset scale was 74.7 billion (year-on-year + 39%), and the profit was 1.09 billion (+ 52%);
C. The financial management subsidiary of Nanjing Bank achieved revenue of 809 million (+ 67%) and profit of 440 million (year-on-year + 46%);
D. the total public offering scale of YONGYING fund is 241.9 billion yuan (+ 27.5%), including 185.7 billion non monetary funds (CAGR reached 37.5% in the past three years);
E. in terms of financial market business, foreign exchange trading, gold inquiry and market making business rank 11 and 10 in the industry;
F. the bill business has accelerated the expansion of customers through key products such as good bill housekeeper, served more than 20000 small and Micro customers, and doubled in two years.
In the past few years, although the economy has fluctuated and some detailed items of Bank Of Ningbo Co.Ltd(002142) income statement may fluctuate between quarters, its 15 profit centers have “opened doors” (the acquisition of Huarong consumer finance national license in 2021 will further enrich the direction of business expansion in the future), and its strong comprehensive ability can effectively “iron out” fluctuations. The average growth rate of revenue in the past three years has reached 24.2%, which is stable ahead of the industry.
The asset quality is stable and excellent, and the proportion of non-performing / overdue loans exceeds 100%.
1) statically, the non-performing ratio at the end of 21 (0.77%) decreased by 1bp steadily compared with that at the end of September, and the proportion of overdue loans (0.76%) decreased by 8bps steadily compared with 21h. All overdue loans have been included in non-performing loans;
2) from the dynamic point of view, it is estimated that the non-performing generation rate and overdue generation rate in 21 years are only 0.71% and 0.69%, which are steadily decreased by 8bps and 2bps compared with 2020;
3) the corporate non-performing rate (0.54%) decreased steadily by 8bps compared with 21h, of which the real estate non-performing rate decreased by 55bps compared with 21h to only 0.93% (the proportion of public real estate loans was only 4.2%).
The non-performing ratio of retail loans (1.24%) increased by 18bps compared with 21h, or partly due to factors such as the increase of economic downturn and the tightening of non-performing recognition in the second half of the year;
4) under the condition that all indicators of asset quality are stable and excellent, Bank Of Ningbo Co.Ltd(002142) continue to strengthen the provision provision and disposal. 21a accrued impairment loss of 12.4 billion (year-on-year + 42.8%), provision coverage rate (526%) and loan allocation ratio (4.03%) increased steadily by 10.2pc and remained unchanged compared with the end of September, including accrued impairment loss of non credit assets of 2.67 billion (1.7 billion more year-on-year), further thickening the “broad provision”.
Investment suggestion: Management landing + performance catalysis, actively optimistic about Bank Of Ningbo Co.Ltd(002142) the investment opportunities Bank Of Ningbo Co.Ltd(002142) has always had steady and solid asset quality and excellent fundamentals among urban commercial banks. The 2021 annual report has a bright performance and full growth in the future: 1) recently: Q1 Jiangsu and Zhejiang credit demand is relatively strong + the amount is sufficient. Under the condition of Bank Of Ningbo Co.Ltd(002142) strong pricing ability and stable and excellent risk control, the performance is expected to maintain high growth and form a catalyst (the first quarterly report is expected to be disclosed on April 27); 2) Medium and long term: Bank Of Ningbo Co.Ltd(002142) 15 profit centers “open doors” and are expected to continue to grow at a high rate in the next three years; 3) There is no need to worry about credit risk: they basically do not participate in real estate business, and corporate and mortgage loans account for only 4.2% and 4.3%; 4) Short term capital supplement or no pressure: by the end of the 21st century, the Bank Of Ningbo Co.Ltd(002142) core tier 1 / Tier 1 / capital adequacy ratio had reached 10.16% / 11.29% / 15.44%, far higher than the regulatory requirements. According to the outlook of the annual report, Bank Of Ningbo Co.Ltd(002142) 22 only proposed to issue tier 2 capital bonds of no more than 22.5 billion, and will strengthen endogenous capital supplement.
In addition, at the end of March, Mr. Zhuang Lingjun officially took office as Bank Of Ningbo Co.Ltd(002142) president and vice chairman, and Mr. Luo Weikai as vice president and financial director. He is optimistic that the whole bank will work together under the leadership of the chairman to maintain high quality and high growth. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 23.815 billion, 29.185 billion and 36.007 billion respectively. The current share price corresponding to 20212023pb is only 1.90x, 1.65x and 1.42x. The current position is actively recommended and the “buy” rating is maintained.
Risk tip: the downward pressure on the macro economy has increased, the financial supervision has exceeded expectations, and the monetary policy has turned to exceed expectations.
