\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
The performance was released strongly, and the two-year compound growth rate ranked first among listed banks
The company disclosed in the annual report of 2021 that the annual revenue and net profit attributable to the parent company increased by 28.37% and 29.87% year-on-year. The annual performance growth rate ranks the third among the listed banks with disclosed data. Further, the compound growth rate of net profit attributable to the parent from 2019 to 2021 is 19.38%, ranking the first among the listed banks with disclosed data. In 2021, the company’s roe increased by 1.73pct to 16.63% year-on-year, only slightly lower than 16.96% of China Merchants Bank, showing strong profitability. The company’s revenue continued to maintain high growth, mainly due to the rapid growth of non interest business. On the basis of maintaining the year-on-year growth rate of interest margin business income at more than 17%, the year-on-year growth rate of non interest income increased to more than 50%.
The net interest margin narrowed slightly and the credit structure continued to be optimized
In 2021, the company’s net interest margin was 2.21%, with a year-on-year decline of 8bp, an increase of 7bp compared with the first three quarters. Thanks to the relatively stable net interest margin in the first three quarters, the annual net interest margin narrowed only slightly.
The company continued to increase its support for manufacturing, Inclusive Finance and green finance, actively introduced all kinds of high-quality assets and core customers, and actively withdrew from risky and inefficient customers. At the same time, take the initiative in reducing the financing cost of entities, and appropriately implement preferential and profit transfer activities. In addition, in terms of retail loans, the company increased mortgage loans within the scope of centralized supervision. Affected by the two cuts in the five-year LPR in 2020, the repricing effect appears. Personal consumption loan is still the main investment direction of retail credit. The company adheres to prudent risk preference, continues to optimize customer base and asset structure, and pays attention to promoting the construction of ecosystem. In addition, in terms of personal business loans, we actively responded to the development requirements of Inclusive Finance and improved the strength and effectiveness of credit supply. Under the comprehensive influence, although the credit yield has declined, it is conducive to the continuous improvement of credit quality.
The non-performing rate remained low and the provision coverage reached a record high
As of the end of 21q4, the non-performing rate was 0.77%, which continued to decline by 1bp compared with the end of 21q3. 21q4 company’s write off of non-performing loans reached 1.88 billion yuan, higher than the total of 1.847 billion yuan in the first three quarters. The timely write off of non-performing loans enabled the non-performing rate to continue to maintain a low level. In fact, the company’s non-performing rate remained low at 0.78% for a long time, and was at the lowest level of listed banks with disclosed data at the end of 21q4. At the same time, the bank’s risk coverage ratio is expected to continue to rise to 215.52% compared with that at the end of Q3, which remains the highest in the history.
Endogenous + exogenous core tier 1 capital has been effectively supplemented
By the end of 21q4, the company’s core tier one capital adequacy ratio had reached 10.16%, an increase of 0.77pct compared with the end of 21q3. Sufficient capital ammunition laid a solid foundation for the company’s asset expansion. At the end of 21q4, the company’s total assets and total loans increased by 23.90% and 25.45% year-on-year, both maintaining a high expansion speed.
Investment suggestion: with capital and expansion, the performance is expected to continue to maintain high-quality growth
Firstly, the capital factors restricting asset expansion have been solved; Secondly, the acquisition of 70% equity of Huarong Xiaojin will open the regional restrictions on the consumption loan exhibition industry of urban commercial banks for the company; Finally, the management of the company has achieved a smooth transition. At present, the company has capital, asset expansion space and strong risk control ability. It is estimated that the net profit attributable to the parent company in 202224 will increase by 21.19%, 18.44% and 17.77% year-on-year. At present, the company’s Pb (LF) is 1.95x, giving a target Pb of 2.3x for 2022, corresponding to the target price of 53.78 yuan, maintaining the “buy” rating.
Risk warning: insufficient credit demand, fluctuating credit risk, AUM growth less than expected
