\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 009 Bank Of Nanjing Co.Ltd(601009) )
The performance growth rate remained above 20% and the profitability was strong
The company disclosed in the 2021 annual report that the annual revenue and net profit attributable to the parent company increased by 18.74% and 21.04% respectively year-on-year, and the compound growth rate of performance in recent two years reached 12.84%. The weighted average roe of the whole year increased by 0.53pct to 14.85% year-on-year, ranking third among listed banks with disclosed data, showing strong profitability. In addition, the company disclosed that in the first quarter report of 2022, the revenue and net profit attributable to the parent company increased by 20.39% and 22.33% respectively year-on-year, of which the net interest income decreased by 0.9% year-on-year, mainly due to the weakening of the net interest margin.
The institutional layout was vigorously promoted, and the credit supply was booming
In terms of price, the company’s net interest margin in 2021 was 1.88%, an increase of 2bp year-on-year. Among them, the loan interest rate decreased by 18bp year-on-year, mainly due to the high proportion of corporate loans (the average balance in 2021 accounted for 70%), which was significantly reduced by the financing cost of the real economy. However, the yield of the company’s retail loans increased by 6BP year-on-year, and the increase in the proportion of high-yield retail loans formed a certain support for the interest margin. The net interest margin of 22q1 company was 1.83%, a decrease of 5bp compared with the whole year of 2021, mainly because Q1 is the peak season for corporate loans. The subsequent increase in the proportion of retail credit is expected to form a certain support for the net interest margin
In terms of volume, the company’s loan balance at the end of 21q4 increased by 17.16% year-on-year, 1.2pct higher than that at the end of 21q3, the year-on-year growth rate of 22q1 continued to rise to 17.74%, the loan increment in a single quarter reached 66% of that in 2021, and the credit boom was high. Specifically, the newly established 15 sub branches in 2021 brought new growth points to the company’s loans, and the new loans accounted for 25.32% of the bank’s total new loans in the same period. With the promotion and implementation of the company’s institutional development plan for branches in the province (100 more at the end of 2023 than at the end of 2020), the high-profile credit granting is expected to continue.
In addition, under the promotion of the transformation of large retail strategy, AUM of the company achieved good growth. Retail AUM increased by 7.94% year-on-year at the end of 21q4 and 16.49% year-on-year at the end of 22q1. In 2021, the average monthly and daily AUM of private bank and private drilling customers increased by 17.5% year-on-year, and the growth of high net worth customers maintained a higher level.
Asset quality was further consolidated, and the proportion of concerned loans fell
The NPL rates at the end of 21q4 and 22q1 were 0.91% and 0.90% respectively, which continued to maintain a low level, while the proportion of concern loans was 1.22% and 1% respectively, showing a significant decline. The total has fallen to 1.9%, the lowest level in history. At the same time, the company strengthened the identification of non-performing loans, and the balance of loans / non-performing loans overdue for more than 90 days decreased by 4.2pct to 89.4% compared with the end of 21q2. Under the compaction of asset quality, the company’s provision thickness continued to increase, reaching 398.41% at the end of 22q1.
Investment suggestion: accelerate the institutional layout, recommend two strategies, and the high profitability is expected to be maintained
The company takes Nanjing as its base, takes advantage of the economic development dividend of Jiangsu to increase the institutional layout, and relies on the two strategies of “large retail and trading bank” to improve its financial service capacity. The credit expansion is expected to maintain a high level. At present, the company still has nearly 20 billion yuan of convertible bonds in the stock conversion period. According to the static calculation, if the stock conversion is completed, the core Tier-1 capital adequacy ratio can be increased by 1.67 PCT, effectively supporting the credit expansion. We are optimistic about the growth of the company’s performance. It is expected that the net profit attributable to the parent company will increase by 20.30%, 18.47% and 15.78% year-on-year from 2022 to 2024. At present, the Pb (LF) of the corresponding company is 1.09 times, giving a target of pb1.00 in 2022 2 times, corresponding to the target price of 14.71 yuan, maintaining the “buy” rating.
Risk warning: the epidemic situation is repeated, the credit demand is insufficient, the credit risk fluctuates, and the Aum growth is less than expected
