\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 229 Bank Of Shanghai Co.Ltd(601229) )
Abstract of the annual report: Bank Of Shanghai Co.Ltd(601229) 2021, the net profit increased by 5.54% year-on-year, and the operating revenue increased by 10.8% year-on-year; The cost income ratio was 21.5%, an increase of 2.59 percentage points year-on-year. At the end of the year, total assets increased by 7.8%, loans increased by 11.4% and deposits increased by 11.8% compared with the beginning of the year. The year-end non-performing rate was 1.25%, the provision coverage rate was 301%, the allocation loan ratio was 3.76%, and the core tier 1 capital adequacy ratio was 8.95%. In 2021, the cash dividend rate was 27.06%.
in Bank Of Shanghai Co.Ltd(601229) 2021, the revenue grew well, driven by wealth management, the handling fee income grew beautifully, the deposit growth improved, and the asset liability structure optimization continued. The company’s recognition of non-performing assets in the fourth quarter became stricter and accelerated, and the non-performing rate increased month on month compared with the third quarter, but the absolute level is still lower than the average of listed banks that have published their annual reports. It is recommended to continue to track the dynamics of asset quality.
Key points supporting rating
Revenue growth was stable and positive, and non credit impairment increased
Bank Of Shanghai Co.Ltd(601229) annual revenue increased by 10.8% year-on-year, slightly higher than that in the first three quarters (+ 10.4%, YoY). With the improvement of interest margin month on month, the net interest income increased by 11.1% year-on-year; With the support of wealth management, the net fee income increased by 61.3% year-on-year. The improvement of the company’s cost income and the provision for the company increased, and the annual net profit increased by 5.54% year-on-year, lower than the growth rate of revenue and profit before provision (+ 7.0%, YoY). In 2021, the loss scale increased by 9.3% year-on-year, of which the loan loss decreased by 43% year-on-year and the non credit loss increased by 398% year-on-year. The main reason is that the company focuses on increasing the provision of losses in real estate, financing platform and other fields and non credit business, so it is necessary to further track the trend of asset quality in relevant fields.
The performance of deposits improved, and the growth rate of retail loans exceeded that of corporate loans
Bank Of Shanghai Co.Ltd(601229) 2021 deposit performance improved, with a year-on-year increase of 11.8%. Deposit performance was better than the average of listed banks, accounting for 59.26% of total liabilities, an increase of 2.15 percentage points over the end of the previous year. Loans increased by 11.4% over the beginning of the year, and corporate and retail loans increased by 10.4% and 11.7% respectively, accounting for 60% and 32% of loans respectively.
Valuation
Taking into account the impact of individual overdue businesses, we adjusted the company’s EPS to 1.70/1.87 yuan in 2022 / 2023 (formerly 1.78/1.93 yuan). At present, the stock price corresponds to 0.47x/0.43x Pb in 2022 / 2023. The valuation is at the low level of listed banks and maintains the overweight rating. Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Regulatory control exceeded expectations.
