\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 009 Bank Of Nanjing Co.Ltd(601009) )
Event: on April 15, the company released its 2021 annual report and 22q1 financial report. In 2021, the revenue was 40.93 billion yuan, yoy + 18.7%; The net profit attributable to the parent company was 15.86 billion yuan, yoy + 21.0%. 22q1 revenue yoy + 20.4%; Net profit attributable to parent company: yoy + 22.3%; The non-performing rate was 0.90%, the provision coverage rate was 398%, and the roe was 17.6%.
The performance growth rate was upward, and the income of other non interest business increased significantly. As of 22q1, the company’s revenue grew by + 1.6pct year-on-year, of which the net interest income slowed down, partly affected by the high base of 21q1, the net handling fee income was stable, financial management and bond underwriting were the core support, and other non interest income has performed well since 21q3, mainly due to the significant increase in the investment income of trading financial assets, highlighting the company’s excellent bond investment and trading ability. The year-on-year growth rate of net profit attributable to the parent company was + 1.3pct month on month. From the perspective of contribution factors, the scale expansion continued to provide solid support, and the contribution of other non interest income increased significantly.
The strategy of large retail and trading banks has been promoted in depth. In 2021, the company’s consumer loans continued to grow at a high rate, with a year-on-year increase of + 24.3%, and the proportion in personal loans increased by 1.4pct compared with 21h1. It acquired Suning Xiaojin and expanded its growth space; Wealth management has achieved remarkable results, with retail AUM + 16.4% year-on-year, including private AUM + 17.5% year-on-year. 22q1 continues the trend of high growth, which is expected to continue to support the growth of medium income and the precipitation of low-cost liabilities. The transaction bank further opened its customers horizontally. As of 22q1, the number of contracted customers of the open platform “Xin e-partner” has increased to 54000, up from + 12.8% at the beginning of the year; The vertical supply chain service scenario has been continuously expanded, and the customer ecology has been gradually improved.
The net interest margin is relatively strong and is expected to continue to improve. In 2021, the company’s net interest margin was 1.88%, slightly lower than 21h1 and + 2bp compared with the beginning of the year. From the perspective of splitting at both ends, the yield of interest bearing assets has increased by 2bp compared with 21h1, and has stabilized and rebounded. Asset expansion has returned to credit. The loan growth rate leads to interest bearing assets of 8.8pct, of which the main increment is contributed to metric manufacturing, leaseholder services and personal consumption loans. Compared with the beginning of the year, the cost ratio of interest bearing liabilities decreased significantly by 18bp, which was basically the same as that of 21h1. Under the two strategic supports, the proportion of deposits and the precipitation of low-cost liabilities are expected to continue to grow, which is conducive to the decline of costs. With the joint efforts of both capital and negative sides, the net interest margin of the company is expected to continue to improve.
The quality of assets continued to be excellent, and the provision remained at a high level. As of 22q1, the company’s non-performing rate was – 1bp higher than that at the beginning of the year, the attention rate of leading indicators was – 22bp, and the asset quality continued to improve significantly. The provision coverage continues to rise slightly at a high level, with strong ability to feed back profits.
Convertible bonds have strong willingness to convert into shares and high probability. The company has a strong willingness to convert 20 billion yuan of convertible bonds into shares. As the first listed bank to publish 22q1 financial report, its performance growth momentum is strong. According to the closing price on April 15, 2022, there is only 10.3% space left from the strong redemption price. If the equity conversion is realized, under the care of regional dividends, the expansion and positive strategic layout of high-tech enterprises will be more supported, and the company’s performance is expected to maintain a high boom.
Investment suggestion: high performance growth, solid transformation and high probability of share conversion
The performance continues to increase, the two strategies are advanced in depth, the net interest margin is strong, the asset quality continues to be excellent, and the willingness and probability of convertible bonds to shares are strong. It is estimated that the EPS of 22-24 years will be 1.72 yuan, 2.06 yuan and 2.46 yuan respectively. The closing price on April 15, 2022 corresponds to 1.0 times of 22 years Pb, maintaining the “recommended” rating.
Risk tip: macroeconomic growth rate declines; Strategic transformation is less than expected; Credit risk exposure.
