\u3000\u3000 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) (601128)
Event: Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the performance express. In 2021, the revenue and net profit attributable to the parent company were RMB 7.653 billion and RMB 2.184 billion, with a year-on-year increase of 16.3% and 21.1% respectively. The annualized roe was 11.58%, with a year-on-year increase of 1.24pct.
Comments are as follows:
The performance maintained rapid growth, and the growth rate increased quarter by quarter. In 2021, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) revenue and net profit increased by 16.27% and 21.13% respectively year-on-year, and the growth rate continued to pick up (the revenue and net profit in the first three quarters increased by 13.0% and 19.0% year-on-year). In a single quarter, the performance growth picked up quarter by quarter; 4q21 single quarter revenue and net profit increased by 26.6% and 28.2% respectively year-on-year. The annualized roe was 11.58%, with a year-on-year increase of 1.24pct, and the profitability continued to improve.
Assets maintained rapid growth, and the asset side was inclined to credit and personal loans. By the end of 2021, the total assets were 246.607 billion, an increase of 18.17% over the beginning of the year; The loan balance was 162.797 billion yuan, an increase of 23.59% over the beginning of the year; Loans accounted for 66% of interest bearing assets, an increase of 2.9pct over the beginning of the year. Among them, personal loans accounted for 61.02% of the total loans, an increase of 4.01 PCT over the beginning of the year, and personal operating loans accounted for 39.84% of the total loans, an increase of 2.94 PCT over the beginning of the year. The balance of deposits at the end of the year was 182.732 billion, an increase of 15.07% over the beginning of the year; Under the background of increasing competitive pressure on deposits in the industry, deposits grew brightly. We judge that the asset side structure is further inclined to individual loans, and the superposition of the new interest rate of individual loans will help stabilize the net interest margin and continue to lead comparable rural commercial banks.
The asset quality remained excellent, and the risk offset ability continued to increase. At the end of 2021, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) NPL ratio was 0.81%, down 0.15pct from the beginning of the year, the same as that at the end of the third quarter. The asset quality of the company has been at a better level in the industry for a long time. The provision coverage rate was 531.98%, an increase of 46.65 PCT over the beginning of the year, an increase of 10.61 PCT over the end of the third quarter, and the risk offset capacity continued to increase. Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) the provision is fully withdrawn, which is in the forefront of comparable peers, and the reverse replenishment profit space is large.
Adhere to the differentiated development of small and micro finance, and remote replication is expected to open up growth space. Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) is positioned in the three rural, small and micro markets, and has formed the small and micro model of “IPC technology + credit factory”. The front end uses IPC technology before loan investigation and cross validation. The back-end adopts a standardized and industrialized approval process to strictly control risk and improve efficiency. Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) microenterprise model has strong professionalism, systematicness and replicability. Through the small and micro model replication of remote branches and rural banks, the contribution of remote deposits and loans and revenue of the company have been improved in recent years, with considerable growth potential.
Investment suggestions: Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) as a leader in small and micro financial business with distinctive characteristics, deeply cultivate the local market; Meanwhile, the credit scale is expected to maintain rapid growth through the expansion of business through remote branches and rural banks. Small and micro businesses have distinctive characteristics, have strong loan bargaining power, and the net interest margin is in a leading position among comparable rural commercial banks. The asset quality is excellent, the provision is sufficient, and the counter replenishment profit space is large. It is estimated that the net profit will increase by 18.1% and 19.1% in 2022 and 2023. The corresponding BVPs are 7.36 and 8.32 yuan / share respectively. Considering the company’s valuation center and fundamentals in recent two years, the company is given 1.1 times the 2022 Pb target valuation, corresponding to the target price of 9.15 yuan / share, maintaining the “strongly recommended” rating.
Risk tip: economic stall and downturn lead to deterioration of asset quality; Unexpected changes in regulatory policies, etc.
