\u3000\u3000 Bank Of Jiangsu Co.Ltd(600919) (600919)
Event:
On January 11, 2022, the company released the annual performance express of 2021, and the profitability of the company increased significantly. In 2021, the company achieved an operating revenue of 63.771 billion yuan, a year-on-year increase of 22.58%; The net profit was 19.291 billion yuan, a year-on-year increase of 31.21%, and the profitability was greatly improved. By the end of 2021, the company’s total assets were 2.62 trillion yuan, a year-on-year increase of 12%, including loans and advances of 1.4 trillion yuan, a year-on-year increase of 16.52%, non-performing loan ratio of 1.08% and provision coverage rate of 307.72%. It has increased year by year since its listing for six years.
Investment summary:
The profitability is growing rapidly. In 2021, the company’s total operating revenue was 63.771 billion yuan, a year-on-year increase of 22.58%, the growth rate decreased by 2.12% month on month, and the net profit attributable to the parent company was 19.694 billion yuan, a year-on-year increase of 30.72%, and the growth rate increased by 0.2pct month on month. 21q4, the company’s revenue was RMB 16.977 billion, a year-on-year increase of 17.08%, and the net profit attributable to the parent was RMB 4.09 billion, a year-on-year increase of 31.54%. It is expected that the growth of the net profit attributable to the parent mainly came from the contribution of less provision under the improvement of asset quality.
The asset structure continued to improve. In terms of loan issuance, the company’s loan balance increased by 16.52% year-on-year in the fourth quarter, and the growth rate decreased by 0.68pct compared with the third quarter. Overall, the growth rate of loan balance was faster than that of asset balance, the proportion of loans continued to increase to 53.47%, and the asset structure continued to improve.
The company’s non-performing loan ratio continued to decline, the margin of provision coverage increased, and the quality of loan assets continued to improve. In 21q4, the company’s non-performing loan ratio was 1.08%, which continued to decline by 4bps on the basis of 21q3, the lowest level in recent five years. The provision coverage rate was 307.72%, 12.19 PCT higher than that of 21q3, at a high level in recent five years, and the asset quality of the company continued to improve.
Investment suggestion: Overall, the company’s performance express in 2021 exceeded expectations. With the company deepening retail transformation and strengthening risk control, the asset quality is expected to continue to improve, and the pressure on asset impairment provision is reduced, which is expected to make a significant contribution to the growth of net profit attributable to the parent company. It is estimated that the year-on-year growth rate of the company’s net profit attributable to the parent company from 2022 to 2023 is 22.75% / 20.97% respectively. Without considering the additional issuance and allotment, EPS is 1.63/1.98 yuan / share respectively. The current A-share price corresponds to PE of 3.94/3.26 and Pb of 0.57/0.5 from 2022 to 2023. Considering the Pb valuation center and fundamentals of the company in recent two years, the company is given a Pb valuation of 1.0x in 2022, with a corresponding reasonable value of 11.32 yuan / share, maintaining a “buy” rating.
Risk tips: economic over expected downside risk, policy risk, business strategy change risk and market risk.
