\u3000\u3000 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) (601128)
Event: Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the 2021 performance express, realizing an operating revenue of 7.653 billion (year-on-year + 16.3%) and a net profit attributable to the parent company of 2.184 billion (year-on-year + 21.1%). The non-performing rate at the end of 2021 was 0.81%, unchanged from that at the end of September.
Performance: the interest margin continues to rise and the profit continues to pick up. In 2021, the annual revenue and profit growth rate was 16.3% and 21.1%, of which Q4 was 26.6% and 28.2% in a single quarter, 2.2pc and 3.4pc higher than Q3. Roe was 11.58%, with a year-on-year increase of 1.2pc.
According to the simple estimation of revenue, after the Q2 interest margin stabilized, the q3-q4 interest margin continued to increase quarter by quarter, mainly due to: 1) the small and micro interest rate environment stabilized, the interest rates of all kinds of loans remained stable, and the proportion of individual loans continued to increase; 2) Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) mature response mechanism (paying equal attention to assessment of quantity and price, increasing credit loans, etc.); 3) The reform of the self-discipline mechanism of deposits on the liability side and the release of dividends.
On a year-on-year basis in a single quarter, the interest margin base of 21q1 is low (3.00% and 2.97% respectively in 20q4 and 21q1). It is expected that the trend of year-on-year increase in interest margin will continue in the future, which is conducive to the continued recovery of revenue and performance. Business: the task of micro loan was over fulfilled, and ABS released space.
1) at the end of the year, the total assets reached 246.6 billion (year-on-year + 18.2%), and the loans reached 162.8 billion (year-on-year + 23.6%), including personal loans of 99.3 billion, an increase of 32% in the whole year (Q4 increased by 4.3% in a single quarter), and the proportion in the total loans has increased to 4pc to 61% compared with the beginning of the year.
2) further split. At the end of the year, personal business loans reached 64.86 billion, an increase of 16.3 billion in the whole year, with a growth rate of 33.5% (including Q4 + 5.8%), accounting for 40% of the total loans. The investment of micro loans was significantly higher than that of last year, and the micro loan strategy of small and scattered continued to be promoted.
3) it is worth noting that in the 21st year Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , ABS has increased its efforts to publish tables (according to the announcement, it is estimated that about 5-6 billion tables will be added in the whole year). After considering the table part, the actual small and micro enterprises will be more invested. Looking forward to 2022, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) micro loan business is expected to continue to maintain a rapid development trend. We expect it to flexibly grasp the lending rhythm through ABS according to the quota.
Combined with both volume and price factors, in 2022, high growth of micro loans + stable pricing, coupled with the year-on-year "low base effect" of 21q1 interest margin, the improvement trend of Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) performance is expected to continue in the future (especially 22q1).
The stable and excellent asset quality reassures the market. While the non-performing rate remained at a low level of 0.81%, the provision coverage and loan allocation ratio Q3 steadily increased by 11pc and 8bps to 532% and 4.31%.
Investment suggestion: on the whole, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) micro loan strategy is advancing steadily. Under the condition of no significant change in the market environment, the improvement of interest margin is expected to support the continuous recovery of Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) performance. At present Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) has announced the plan of 6 billion convertible bonds, which will bring medium and long-term and low-cost funds after successful issuance, which is conducive to the rapid expansion of micro loan business and seizing the market in the future. In the medium and long term, it is expected to gradually grow into the leader of micro loan business in Jiangsu Province. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 2.184 billion, 2.649 billion and 3.217 billion respectively. At present, the stock price corresponds to only 0.97x and 0.88x of 2021 and 2022pb, maintaining the "buy" rating.
Risk tip: the macroeconomic downturn, the shift of monetary policy beyond expectations, and the competition of micro loan business beyond expectations.
