Bank Of Jiangsu Co.Ltd(600919) high profit, undervalued value, and negative concerns decreased

\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 919 Bank Of Jiangsu Co.Ltd(600919) )

Event description

The company released its 2021 annual report, with annual revenue of 63.771 billion yuan, a year-on-year increase of + 22.58%; The net profit attributable to the parent company was 19.694 billion yuan, a year-on-year increase of + 30.72%, with a weighted average roe of 12.7% 60%, an increase of 0.69 percentage points over the same period last year.

Event comments

The profit growth rate ranks first and the profitability is improved. The operating income increased by 22.58% year-on-year, the increase of loan balance combined with the improvement of net interest margin, and the net interest income increased by 22.96%; The increase of handling fee income from agency, custody and bank card led to a significant increase of 39.83% in the net income of handling fee and commission; At the same time, the provision for impairment decreased slightly compared with 2020; The net profit attributable to the parent increased by 30.72%, ranking first among listed banks. The profitability was improved, and the ROA was increased to 0.82%, returning to the level of 2015.

Jiangsu has developed regional economy and strong regional competitiveness. 1) Increase in loan volume: the company focused on key areas such as advanced manufacturing industry, infrastructure industry and green environmental protection industry. In 2021, the balance of corporate loans was 726.1 billion yuan, a year-on-year increase of 13.99%, of which the balance of manufacturing loans was 160 billion yuan, a year-on-year increase of 24%; Infrastructure loans reached 278.3 billion yuan, a year-on-year increase of 16%; Loans for small and micro enterprises and scientific and technological innovation enterprises continued to rank first in Jiangsu Province. 2) Recovery of interest margin: the demand for credit in the regional market is relatively abundant, while the proportion of retail loans increases. By expanding low-cost deposits to control the cost of liabilities, the net interest margin has increased steadily under the pressure of commercial banks' net interest margin. The net interest margin in 2021 was 2.28%, an increase of 0.14 percentage points over the end of the previous year.

The trading bank and financial market business maintained the leading position of urban commercial banks. The number of trading bank customers and business volume increased by 84% and 60% respectively, and the international settlement volume was US $193.1 billion, with a year-on-year increase of 24.42%. The commercial bank in the asset city of the free trade zone ranked first, and was approved as the first pilot qualification of cross-border e-commerce export settlement business in Jiangsu Province. Financial market business and financial bond underwriting continued to rank first among urban commercial banks, with Custody Assets of RMB 3.47 trillion, an increase of 14%. The custody scale of securities investment funds continued to rank first among urban commercial banks.

Retail strategy accelerated. Retail deposits and loans increased by 17.75% / 19.48% respectively, higher than the growth rate of deposits and loans. In the first quarter, the retail AUM exceeded 1trillion, the balance of financial assets of wealth customers and private bank customers exceeded 240billion yuan, the asset scale and the number of customers increased by 26%, and the stock scale of non monetary public funds sold on a commission basis increased by 150% compared with the end of the previous year. The number of mobile phone customers in the commercial city is more than 13 million, with more than 4.5 million mobile phone customers.

Pay attention to the decline in the proportion of overdue loans. The non-performing loan ratio was 1.08%, down 0.24 percentage points; The proportion of concerned loans decreased by 0.02 percentage points, and the proportion of overdue loans decreased by 0.03 percentage points; The provision coverage rate was 307.72%, an increase of 51.32 percentage points.

Investment advice

Relying on the strong regional economy of Jiangsu and its surrounding areas, the company has strong regional competitiveness, steadily promoted the transformation of trading banks, financial markets and retail, and maintained high profitability and high growth. It is estimated that the company's revenue from 2022 to 2024 will be 74.286 billion yuan, 87.390 billion yuan and 103419 billion yuan respectively, the net profit attributable to the parent company will be 23.428 billion yuan, 28.194 billion yuan and 34.426 billion yuan respectively, the EPS will be 1.59, 1.91 and 2.33 respectively, the net assets per share will be 16.44, 18.91 and 21.98, and the corresponding Pb will be 0.45, 0.39 and 0.33 times respectively. Give "overweight" rating.

There are risks

A sharp decline in macro-economy; Major risk events occur in the company; Local outbreaks are repeated.

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