\u3000\u3 China Vanke Co.Ltd(000002) 839 Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) )
Core view
Revenue and non net profit deducted increased steadily. In the first quarter of 2022, the revenue reached 1.2 billion yuan, with a year-on-year increase of 11.8%. The growth rate increased slightly by 1.8 percentage points compared with last year’s annual report, mainly due to the rebound in the growth rate of net interest income; The net profit attributable to the parent company in the first quarter was 430 million yuan, an increase of 29.7% year-on-year, mainly because the company recognized the equity investment in Taicang rural commercial bank as a long-term equity investment, and recognized the non operating income for the difference between the investment cost and the identifiable net value at the investment time point; The company deducted 360 million yuan of non parent net profit, an increase of 8.0% year-on-year. In the first quarter of 2022, the weighted ROE (non annualized) was 2.96%, up 0.03 percentage points year-on-year.
The scale of assets maintained rapid growth. In the first quarter of 2022, the total assets increased by 18.1% year-on-year to 175.3 billion yuan. The growth rate remained near the same level as that in previous quarters, which was significantly higher than the industry average. Among them, deposits increased by 10.9% year-on-year to 131.6 billion yuan, with a slight decrease in growth rate; Loans increased by 21.3% year-on-year to 106.7 billion yuan, still maintaining a high growth rate; At the end of the period, the core Tier-1 capital adequacy ratio was 9.71%, with sufficient capital.
The year-on-year decline in net interest margin narrowed. The average daily net interest margin of the company in the first quarter was 2.23%, a year-on-year decrease of 23bps, which was significantly narrowed compared with the decrease of 31bps in the annual report, which was also the main reason for the recovery of the growth rate of net interest income. From the historical data, the company’s single quarter net interest margin fluctuates greatly, but from the overall trend, the net interest margin is still in the downward channel. Looking forward to the whole year, it is expected that there will still be downward pressure on the net interest margin, but the narrowing of the decline will promote the recovery of the growth rate of net interest income.
Excellent asset quality and sufficient risk offset capacity. The company’s non-performing rate at the end of the first quarter was 0.94%, which remained stable and the lowest level in recent years; The concern rate was 1.54%, down 7 BPS month on month, also at the lowest level in recent years. Generally speaking, the asset quality of the company is in the improvement channel, and the asset quality is good. At the end of the first quarter, the provision coverage increased by 7 percentage points to 482% month on month, with sufficient risk offset capacity.
Investment suggestion: we slightly adjusted the profit forecast according to the non recurring profit and loss. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.62/18.8/2.16 billion, with a year-on-year growth rate of 24.5/15.6/15.3%; Diluted EPS is 0.90/1.04/1.20 yuan; The current share price corresponds to PE of 7.3/6.4/5.5x and Pb of 0.87/0.78/0.70x, maintaining the “overweight” rating.
Risk tip: the weakening macroeconomic situation may have an adverse impact on the quality of bank assets.
