\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 229 Bank Of Shanghai Co.Ltd(601229) )
Event overview
Bank Of Shanghai Co.Ltd(601229) release the annual report: in 2021, the operating revenue was 56.230 billion yuan (+ 10.81%, YoY), the operating profit was 23.558 billion yuan (+ 5.54%, YoY), and the net profit attributable to the parent company was 22.042 billion yuan (+ 5.54%, YoY); At the end of 2021, the total assets were 2653199 billion yuan (+ 7.76%, yoy; + 0.04%, QoQ), deposits were 1450430 billion yuan (+ 11.81%, yoy; - 0.41%, QoQ), and loans were 1223748 billion yuan (+ 11.44%, yoy; + 0.93%, QoQ). Net interest margin 1.74% (-8bp, YoY); The non-performing loan ratio is 1.25% (+ 6BP, QoQ), the provision coverage ratio is 301.13% (-30.64pct, QoQ), and the capital adequacy ratio is 12.16% (-0.21pct, QoQ); Annual roe11 80%(-0.29pct，YoY)。 The proposed cash dividend is 0.4 yuan / share, with a dividend rate of 27.06%.
Analysis and judgment:
In the agency category, the high increase in revenue drove the improvement of annual performance, and the increase of Q4 operation and credit costs dragged down the negative increase of profits
the annual performance of Bank Of Shanghai Co.Ltd(601229) 2021 was improved compared with that of 2020. The revenue, PPOP and net profit attributable to parent company were + 10.8% / 7.2% / 5.5% year-on-year respectively, and increased by 8.9pct/4.1pct/2.6pct respectively compared with that of the previous year. Under the slowdown of the growth rate of asset expansion and the narrowing of interest margin, the growth rate of net interest income + 11% year-on-year decreased slightly compared with that of the previous year, which was mainly driven by the 61.3% year-on-year increase of net fee income. Among them, the commission income of consultants and clearing and settlement increased negatively year-on-year, and that of agents increased by 126% year-on-year, contributing 66% of the overall commission income, mainly driven by financial management and fund consignment business (the sales scale of non commodity public funds increased by + 102% year-on-year). On the whole, the strategy of "getting customers + living customers" promotes the rapid development of wealth management business. The annual growth rate of Bank Of Shanghai Co.Ltd(601229) retail AUM exceeds 20%, and the total amount will exceed 900 billion yuan by the end of next year. From the perspective of structure, on the one hand, in terms of product form, in addition to the high growth of consignment scale, personal deposits and personal financial management have increased by more than 19%, accounting for 42% and 46% of AUM respectively; On the other hand, we will continue to build the advantages of pension finance and promote the annual growth rate of AUM of pension customers to 20%, accounting for 46% of the total AUM; In addition, under the refined customer stratification system, the growth of customers at all levels disclosed by the company reached a new high in recent ten years. Driven by the development of wealth business, the median income of wealth management was + 32% year-on-year.
On the expenditure side, the business management fee increased by 25% year-on-year under the low base, and the impairment loss was withdrawn by 9.3% year-on-year (compared with + 6.6% marginal in 2020), which dragged down the performance growth rate lower than the revenue. The provision of operating costs and credit costs is more concentrated in the fourth quarter. Therefore, in the Q4 single quarter, when the annual revenue growth rate is still slightly higher than that in the first three quarters, the growth rate of PPOP and profit has dropped to a certain extent. Under the rise of Q4 non-performing assets, the provision for impairment has been increased, which has dragged down the single quarter profit growth rate to - 7.5%.
Under the asset structure adjustment, the retail mortgage was added, and the improvement of the average daily deposit structure supported the stabilization of the interest margin in the second half of the year
Under the constraints of asset restructuring and core capital, the growth rate of the company's table expansion slowed down. In 2021, the growth rate of assets was 7.8%, which was about 2.3pct lower than that of the previous year. Among them, loans, investment assets and interbank assets were + 11.4% / + 4.7% / + 5.9% year on year respectively. Under the slowdown of Q4 loan, the total assets were basically flat month on month (Q3). Continued adjustment of asset allocation structure: 1) among loans, general corporate, bill and retail loans were + 10.4% / + 18.4% / + 11.7% year-on-year respectively, and retail investment was further repaired compared with the previous year. In addition, in the first half of the year, the scale of corporate loans generally decreased, mainly driven by a 37% increase in bills, and retail increased by 6.6% month on month in the second half of the year, a steady increase compared with 4.8% in the first half of the year. Among them, corporate loans focus on increasing the investment in relatively low-risk leasing, water conservancy and sanitation, construction, finance and other fields, while the investment scale of real estate and manufacturing loans increased due to the bad influence of individual customers; Retail restructuring continued to reduce risks and adjust the structure. During the year, the scale of consumer loans continued to drop by 10%, and credit cards recovered by + 12% year-on-year compared with the previous two years, mainly because mortgage and operating loans increased by + 26% / + 64.3% year-on-year respectively. In particular, operating loans accounted for 70% of the increment of retail loans in the second half of the year. The overall contribution of mortgage scale in retail increased to 40% at the end of 2021, surpassing consumer loans for the first time. In addition, the growth rates of green, inclusive and supply chain credit balances reached 180%, 65% and 38% respectively. 2) From a regional perspective, the proportion of local loans in Shanghai has increased significantly. When the scale of other regions has decreased, the balance of loans in the Yangtze River Delta including Shanghai accounted for 75% at the end of the year, up 6pct from the previous year. 3) Investment assets mainly reduced the scale of trading financial assets such as interbank financial management and asset management plan, and increased the allocation of policy bank bonds, which also led to a year-on-year decline in investment income and fair value profit and loss.
On the liability side, deposits increased by 12% in 2021, higher than 7.8% of total liabilities, which mainly increased the issuance of bonds, including a 24% increase in the scale of interbank certificates of deposit, as well as the issuance of financial bonds and convertible bonds at the right time. At the same time, 86% of the annual deposit increment is time deposits, and the degree of deposit regularization has deepened, but the proportion of daily average balance of live deposits has increased slightly, which is contributing to the interest margin to a certain extent.
Therefore, affected by the reduction of asset allocation risk preference, the annual net interest margin disclosed by the company was 1.74%, a year-on-year decrease of 8bp, of which the return on asset side loans and investment assets decreased by 34bp and 14bp respectively, especially the return on retail loans decreased by 65bp year-on-year. The deposit cost rate decreased by 8bp year-on-year, forming a certain hedge, which is mainly due to the decline of long-term interest payment rate under the reform of deposit pricing mechanism. Compared with the net interest margin of 1.73% (year-on-year -9bp) in the first half of the year, the interest margin rebounded in the second half of the year. On the one hand, the allocation of retail loans, especially relatively high-yield business loans, slowed down the downward range of asset side yield to a certain extent; On the other hand, the deposit cost rate rose, but the proportion of live deposits in daily average deposits rebounded month on month in the second half of the year, which also formed support.
The quality of corporate credit is under pressure, and the allocation coverage rate of less provision and strong write off has dropped
in Bank Of Shanghai Co.Ltd(601229) year, affected by the risk exposure of individual corporate customers, the year-end non-performing rate was 1.25%, rising 3bp and 6BP respectively on a month on month basis. Among them, the structural adjustment of retail business has achieved remarkable results. While increasing the settlement of non-performing loans of various categories, the overall personal loans have decreased double compared with the beginning of the year, and the non-performing rate at the end of the year has decreased by 34bp to 0.77% compared with the medium-term, falling to less than 1% for the first time. The non-performing rate of corporate loans increased by 33bp to 1.67% over the medium term, which is a high level in recent years. The non-performing rate of real estate, manufacturing and other fields at the industry level has increased. The scale of the information technology industry is small and the non-performing rate has increased significantly. The corresponding companies deal with the risks in the real estate field by reducing exposure and dissolving exit.
Among the leading indicators, the loans of special interest decreased both month on month, accounting for 1.65% at the end of the year, 26bp and 5bp lower than that at the beginning of the year and Q3 respectively; However, overdue loans fluctuated, mainly due to the increase in overdue within 90 days, resulting in the overall overdue rate rising by 48bp to 2.08% compared with the beginning of the year, and the overdue 90 + / non-performing loans also rose to 110%, but the form of overdue loans is mainly mortgage loans.
The company said that the main reason is that Peking University Founder series of large overdue loans have been included in the management of the debt Committee and promoted restructuring. At present, it has entered the implementation stage and has made full provisions.
In 2021, the company made more provision for impairment on a year-on-year basis, but mainly increased the impairment of bond investment assets. Under the condition of 44% less provision for credit impairment on a year-on-year basis, the overall credit cost fell to 0.82%, only half of that of the previous year. Superimposing the marginal strength of write off in the second half of the year, we calculated that the non-performing generation rate of write off in the second half of the year increased month on month, and the provision coverage decreased accordingly. It was recorded at 301% at the end of the year. After gradually rising in the first three quarters, it fell 31pct month on month, but it still has a high safety margin at the absolute level.
Investment advice
the highlight of the performance of Bank Of Shanghai Co.Ltd(601229) annual report lies in the high growth of medium income driven by wealth management, the repair of retail investment in the second half of the year and the improvement of deposit volume and price support the stabilization of interest margin during the year, but the strategic transformation and business structure adjustment are still in progress, the downward movement of asset side risk preference has a certain pressure on interest margin, and the structural risk of corporate business in the second half of the year is exposed to a certain extent under the current macroeconomic background, Attention should be paid to the disturbance of subsequent asset quality deduction to credit cost. In view of the performance of the annual report, we slightly adjusted the forecast of the company's revenue of 58 / 637 / - billion yuan in 22-24 years to 59.7/648/71.4 billion yuan, and the forecast of net profit attributable to the parent company of 26.5 / 308 / - billion yuan in 22-24 years to 23.0/254/28.9 billion yuan, with a corresponding growth rate of 4.4% / 10.5% / 13.5%; 22-24 years eps1 The forecast of 79 / 2.09 / - yuan is 1.55/1.72/1.96 yuan, corresponding to the closing price of 6.61 yuan / share on April 21, 2022, and Pb is 0.47/0.43/0.40 times respectively, maintaining the "overweight" 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.
