\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 036 China Merchants Bank Co.Ltd(600036) )
Key investment points
Highlights of the quarterly report: in the first quarter, the revenue increased by 8.3% year-on-year, basically in line with expectations: the growth rate of net interest income remained at a high level, with a year-on-year increase of 10%. As expected, the handling fee is a drag item, with a year-on-year increase of only 5.5% on the basis of high base. PPOP increased by 8.7% year-on-year and the growth rate was slightly higher than the revenue: the early technology investment was gradually transformed in the aspect of cost efficiency improvement. The growth rate of net profit returned to the normal level before the epidemic, with a year-on-year increase of + 12.5%; Provision has room to release profits. 2. Net interest income increased by 2.2 percentage points month on month: the scale grew steadily, and the net interest margin rebounded month on month in the first quarter. Among them, the average daily interest bearing assets in a single quarter increased by 3.4% month on month, and the average daily net interest margin in a single quarter rebounded 3bp to 2.51% month on month. The month on month recovery of net interest margin was mainly due to the downward contribution of liability side cost, and the asset side yield was stable. At the beginning of the year, the company made a good start in deposits. With the increase of the proportion of low-cost deposits, it contributed to the decline of liability end costs to a certain extent. 3. Deposits made a good start in the first quarter. The increase in deposits in the first quarter was much higher than that in the same period last year, with an increase of 386.7 billion, an increase of 102.5 billion over the same period last year; It also far exceeds the scale of new loans (133.4 billion). 4. The company’s strategy is leading and clear: explore the 3.0 model in the digital era, the business model of big wealth management, the digital operation model and the open and integrated organization model. There are 176 million retail customers. Among them, there are 3.89 million Golden Sunflower and above, and 125000 private customers. The number of customers increased, and the number of wealth customers maintained a relatively high growth. Retail customers increased by 9.1% year-on-year, while sunflower and private customers increased by 18% and 17% year-on-year respectively. The total asset balance of retail customers under management is 11.3 trillion yuan, including 9.3 trillion yuan of total asset balance of customers under management of sunflower and above, and 3.5 trillion yuan of assets under management of private banks. AUM managed by golden card, Puka, golden sunflower and private bank increased by 21.5%, 17.6% and 17.3% year-on-year respectively, and the average asset scale of managed customers increased; Customer account concentration has increased. AUM’s growth rate was higher than that of wealth management income. The main support was that the growth rate of savings deposits was not weak. AUM increased by 5.4% month on month and savings deposits increased by 6.4% month on month; In addition, the growth of financial management is not expected to be weak.
Insufficient quarterly reports: 1. The handling fee weakened as scheduled, and the net handling fee increased by 5.5% year-on-year (vs + 18.8% year-on-year in 2021). The weakening growth rate of wealth management fees was the main drag, with a year-on-year increase of – 11%. The capital market is depressed, and the new development fund is under pressure; Superimposed off balance sheet real estate pressure, resulting in a sharp decline in agency fund and trust income. 2. Real estate, retail and other adverse pressures have increased. The defective rate of 1q22 was 0.94%, up 3bp month on month. The net generation of annualized non-performing in a single quarter was 0.71%, up 23bp month on month. The company has also strengthened the recognition and disposal of non-performing products at the same time, and the overall safety margin is still high. In recent years, the transformation of corporate strategic key customers has been fruitful, and has basically become a ballast for the quality of corporate assets. The proportion of strategic customer loans to corporate loans is close to 60%. The retail customer base is relatively high-quality, the mortgage is the basic market, the overdue rate of small and micro credit is lower than the non-performing rate and remains low, with good risk control.
Investment suggestion: the endogenous driving force of performance is the most sustainable, with continuous key recommendation. The current share price of the company corresponds to 2022e and 2023epb1 3X/1.14X； PE7. 93x / 6.91x (pb0.58x/0.52x, pe5.05x / 4.57x) China Merchants Bank Co.Ltd(600036) all indicators show its sound and excellent fundamentals. At the same time, it has strong strategic implementation. In the existing system of retail business, its moat can continue to deepen and adapt to the latest development of financial technology. China Merchants Bank has high “scarcity” in banking stocks and is worthy of long-term holding. It is an excellent company that we focus on and continue to recommend.
China Merchants Bank Co.Ltd(600036) value and understanding of leaders leaving office: recent changes in leaders will have a negative impact on market sentiment; In the medium and long term, the unique value of CMB has not changed, and the market confidence will come back after the new leader lands. 1. The president’s departure is not expected to be the reason for his business in China Merchants Bank. China Merchants Bank itself has no risk. 2. The unique value of CMB is that it has gradually accumulated “moat of business model” in retail and wealth management over the past 40 years; It lies in the long-term formation of internal marketization and external customer-oriented “corporate culture” (which is scarce in the banking industry); It lies in the “team members” formed by a large number of pragmatic, diligent, professional and enterprising middle and senior managers and business backbones. These underlying values will not change due to the change of the president. 3. The unique value of CMB lies in the good corporate governance structure provided by the major shareholders of China Merchants Group. China Merchants Group is one of the most market-oriented and international groups. In the past 40 years, China Merchants Group has selected three excellent presidents for China Merchants Bank and designed a market-oriented corporate governance structure with president responsibility system and appropriate supervision for China Merchants Bank. Selecting an excellent new president is a high probability event.
Note: according to the financial report of the first quarter, we fine tune the profit forecast and predict that the net profit attributable to the parent company from 2022 to 2023 will be 136.9 billion and 156.8 billion (the previous values were 138.4 billion and 159.7 billion).
Risk tip: the economic downturn exceeded expectations and the company’s operation was less than expected.
