\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Event overview
Bank Of Hangzhou Co.Ltd(600926) release the annual report: in 2021, the operating revenue was 29.361 billion yuan (+ 18.36%, YoY), the operating profit was 10.580 billion yuan (+ 31.20%, YoY), and the net profit attributable to the parent company was 9.261 billion yuan (+ 29.77%, YoY); At the end of 2021, the total assets were 1.39 trillion yuan (+ 18.93%, yoy; + 4.55%, QoQ), deposits were 0.81 trillion yuan (+ 16.14%, yoy; + 3.81%, QoQ), and loans were 0.59 trillion yuan (+ 21.69%, yoy; + 4.45%, QoQ). Retail aum4242 3.1 billion yuan (+ 10.91%, YoY). 2021a net interest margin 1.83% (- 15bp, YoY); The non-performing loan ratio is 0.86% (- 4bp, QoQ), the provision coverage ratio is 567.71% (+ 8.29pct, QoQ), the allocation loan ratio is 4.86% (- 0.19pct, QoQ), and the capital adequacy ratio is 13.62% (- 0.25pct, QoQ); Annual roe12 33%(+1.19pct， YoY)。 The proposed cash dividend is 0.35 yuan / share, and the disclosed dividend rate is 24.55%.
Analysis and judgment:
Non interest contribution revenue is stable, and the performance growth rate ranks in the forefront of the industry
Bank Of Hangzhou Co.Ltd(600926) 2021 revenue + 18.4% year-on-year, slightly lower than 20% in the first three quarters, but maintained a high growth trend as a whole. Among them, when the net interest income was + 9.2% year-on-year, it was mainly driven by the 50% increase in non interest income, including the net fee income and other non interest income, which were + 19.7% / + 87.2% year-on-year respectively. Among the commission income, benefiting from the development opportunities of wealth management, the trust and trust collection, which accounts for 55%, achieved an annual growth rate of + 29%, and the agency and settlement collection also contributed a higher growth rate of 33% and 41% respectively, making up for the decline of bank card collection. Under the implementation of the “household management” customer hierarchical management system in 2021, the Bank of Hangzhou achieved AUM + 11% year-on-year on-year on-year growth of 3.6% in the number of basic customers, of which the scale of financial management increased by 16.4%, The scale of consignment funds increased by 165% year-on-year, which greatly boosted the growth of medium income. In the fourth quarter alone, the growth rate of revenue has slowed down, mainly due to the marginal slowdown of the growth rate of interest business accounting for more than 70% of revenue. The net interest income in Q4 increased by only 3.5% year-on-year. When the scale is stable and rising, it is expected to be mainly affected by the convergence of interest margin.
In the case of year-on-year + 17% of PPOP, the company’s impairment provision was only + 5.4% year-on-year, driving the year-on-year increase of net profit attributable to the parent by 29.8%, which is in the first echelon of listed banks, second only to Jiangsu, Zhangjiagang and Bank Of Ningbo Co.Ltd(002142) . The annual performance growth rate further increased by 3.6pct compared with the first three quarters, which is mainly due to the 23.4% less provision for impairment in the fourth quarter and the accelerated release of profits. From the perspective of the structure of impairment provision, 48.5% of the provision scale in 2021 is financial investment impairment, with an increase of 124% year-on-year, while the provision scale of credit asset impairment is only 60% of that of the previous year. Under the stable and excellent asset quality, the low credit cost will continue to support the performance and release space.
In the second half of the year, retail consumer loans increased significantly, and there is still pressure on the interest margin of additional active liabilities
The asset growth rate of Bank of Hangzhou in 2021 was 18.9%, which was further improved over the previous year, and the overall expansion trend continued rapidly. Under the pressure drop of interbank asset allocation scale (mainly in the fourth quarter), loan and investment assets were + 22% / + 24% year-on-year respectively, and the expansion was accelerated month on month at the end of the year. Specific structure: 1) among loans, the scale of bills doubled year-on-year, and public and retail loans increased by 18.3% and 19.2% respectively. Among them, corporate loans continued to focus on large-scale infrastructure, including water conservancy, sanitation, electric heating, gas and other industries, with a year-on-year investment scale of + 29%, accounting for 56.2% of the total corporate loans, further increasing by 2.5pct compared with the beginning of the year; The strategy led retail loans to focus on consumer loans and business loans, with the scale growth rate exceeding 20%. It is worth noting that the stock scale of business loans increased to 38% in retail in 2021, surpassing mortgages for the first time. 2) In terms of the margin of the year, corporate loans in the second half of the year were mainly bills. Generally, the growth of corporate loans slowed down. At the same time, retail sales and investment increased significantly. The proportion of retail sales in the quarterly loan increment increased quarter by quarter, Q4 reached 62%, mainly from consumer loans. When the volume contracted by 5% in the first half of the year, it returned to positive growth in the second half of the year, with an increase of 30% over the medium term. 3) Regionally, the proportion of loans in Zhejiang Province, Shanghai and Jiangsu has further increased, and the dividend of regional economic development under the integration of the Yangtze River Delta has enabled the company to expand its business. 4) The investment assets have maintained an increase of more than 23% for two consecutive years. Compared with the bond assets mainly allocated with corporate bonds in the previous year, the bonds were allocated with government bonds in 2021 (year-on-year + 60%, concentrated in the second half of the year). At the same time, the investment scale of equity assets including funds and asset management plans also increased by 20% year-on-year. Considering that the core capital adequacy ratio of the company was 8.43% at the end of the year, the risk appetite of asset investment during the year was also restricted to some extent.
On the liability side, deposits increased by 16.1% in 2021, slightly lower than 19.5% of total liabilities. Active liabilities were added at the right time, and the scale of bonds payable increased by 97.4% year-on-year. Among them, the scale of financial bonds and interbank certificates of deposit doubled over the previous year, especially the issuance of interbank certificates of deposit was concentrated in the second half of the year, and the proportion of interbank certificates of deposit in bonds payable at the end of the year increased to 76%. While the growth of deposits was relatively stable during the year, the proportion of time deposits dominated by corporate time deposits increased quarter by quarter.
Therefore, the pressure of interest rate spread is not only affected by the decline of asset side pricing, but also affected by the structure of liability side. The annual net interest margin disclosed by the company was 1.83%, a year-on-year decrease of 15bp, of which the deposit cost rate decreased by 12bp year-on-year, and the asset side loans and investment assets decreased by 26bp and 22bp year-on-year respectively, forming a certain hedge. From the marginal point of view, compared with the net interest margin of 1.93% (year-on-year – 3bp) in the first half of the year, the pressure is mainly in the second half of the year. On the one hand, the high increase of bill scale restricts the asset side pricing, on the other hand, the deposit cost rises month on month in the second half of the year, and although the cost ratio of active debt decreases, it increases more structurally, squeezing the interest margin space as a whole. The Q4 single quarter net interest margin measured by the average at the end of the initial period fell by 4bp month on month, and the quarterly decline converged. It is mainly driven by the recovery of return on assets, which is expected to come from the additional allocation of high-yield retail loans in the fourth quarter. In the future, the retail business will also support the interest margin.
The asset quality was further consolidated, and the advantage of appropriation coverage rate was prominent
Bank Of Hangzhou Co.Ltd(600926) asset quality performance is outstanding, and the non-performing scale has decreased quarterly during the year. The non-performing rate at the end of the year is 0.86%, which has decreased by 21bp and 4bp respectively on a month on month basis, and has continued to decline for 20 consecutive quarters. Among them, the non-performing rates of public and retail loans were 1.17% and 0.35% respectively, with an annual decrease of 30bp and 10bp. The non-performing rate of the real estate industry was disturbed, increased by about 1PCT to 3.78% compared with the beginning of the year, and concentrated in the second half of the year. The main reason was that individual operating property loan customers were affected by the epidemic and the rental income decreased, and the classification was adjusted down accordingly, but the interest payment at the end of the year was normal, the collateral was sufficient, and the risk was expected to be controllable.
In addition, the white list system of the company’s real estate business and more than 90% of the projects are concentrated in core cities, which are guaranteed and fully provided.
The proportion of loans in the fourth quarter was only 38.0% lower than that in the fourth quarter; The scale and proportion of overdue loans fell further than that in the medium term, accounting for 0.61% at the end of the year. The corresponding overdue 90 + / non-performing and overdue / non-performing loans were only 64.7% and 71.8% respectively, which were identified very cautiously. The annual write off accounts for only 18.8% of the average non-performing value. Therefore, it is estimated that the non-performing generation rate added back to write off is 0.17%, which is far lower than that of comparable peers, and the generation rate in the second half of the year is lower. On the one hand, the excellent asset quality ensured that the credit cost ratio fell to 0.88% during the year. On the other hand, under the slowdown of stock non-performing liquidation and impairment provision, the provision coverage naturally increased to 567.71%, with an annual increase of nearly 100pct and a quarter on quarter increase of 8.3pct. Although the allocation ratio fell slightly due to the rapid increase of loans, it remained at a high level of 4.86% as a whole.
Investment advice
Overall, Bank Of Hangzhou Co.Ltd(600926) relying on its regional advantages, it has deepened its strategic reform and achieved high growth in scale and profitability. Taking the company’s business as the ballast and retail microenterprises are the two growth poles. The income from wealth management is beautiful. At the same time, the excellent asset quality and the first provision level in the industry ensure the release of performance. At present, the company is in the year of promoting the new round of five-year plan (20212025). Under the guidance of the “second five year plan”, the company is committed to the transformation from scale driven to efficiency driven. The subsequent active promotion of convertible bonds and equity conversion will supplement the formation of core capital and support the high-quality growth of future performance.
In view of the performance of the annual report, we slightly adjusted the forecast of the company’s revenue of 30.4/34.7 / – billion yuan in 22-24 years to 32.8/37.2/42.7 billion yuan, and the forecast of net profit attributable to the parent company of 10.2/122 / – billion yuan in 22-24 years to 109 / 129 / 15.7 billion yuan, with a corresponding growth rate of 17.9% / 18.0% / 21.6%; 22-24 years eps1 The forecast of 64 / 1.97 / – yuan is 1.75/2.09/2.55 yuan, corresponding to the closing price of 15.3 yuan / share on April 15, 2022, and Pb is 1.13/1.01/0.89 times respectively, maintaining the “buy” rating of the company.
Risk tips
1. The risk that the future repair of the overall economy is less than expected and the credit cost increases significantly;
2. Major business risks of the company.
