\u3000\u3000 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) (601128)
Key points
Event:
On January 11, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) released the performance express for 2021. In 2021, it realized an operating revenue of 7.653 billion yuan, a year-on-year increase of 16.27%, and a net profit attributable to the parent company of 2.184 billion yuan, a year-on-year increase of 21.13%.
Comments:
Revenue and profit increased. The year-on-year growth rates of Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) revenue and net profit attributable to parent company in 2021 were 16.27% and 21.13% respectively, which increased by 3.27pct and 2.11pct respectively compared with 1-3q. In Q4 of 2021, the year-on-year growth rates of single quarter revenue and net profit attributable to parent company were 26.6% and 28.2% respectively, with a month on month increase of 2.2pct and 3.4pct respectively.
The loan is “prosperous in both supply and demand”, and Nim is expected to be stable and good. At the end of 2021, the year-on-year growth rate of loans was 23.6%, a slight decrease of 0.4 percentage points compared with the end of the third quarter, and the overall growth rate is still at a high level. Although the macroeconomic downward pressure increased in the second half of 2021, and sporadic epidemics also occurred in Jiangsu, the Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) was not significantly affected, and the credit supply showed a “boom in supply and demand”. Considering the improvement of revenue growth month on month, it is estimated that Nim of the company will be stable and better in 2021 than in the first three quarters.
Personal business loans have further developed, and the advantages of differentiated “track” have continued to highlight. 21q4 personal operating loans increased by 3.549 billion, a year-on-year increase of 1.589 billion, with a growth rate of 32.3%, an increase of 2.0pct compared with 1-3q; The proportion of personal operating loans increased by 2.1pct to 39.84% compared with 1-3q. Since Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) 21 years ago, it has started to develop credit insurance business, and its differentiated competitive advantage in Pratt & Whitney small and micro enterprises continues to highlight.
The asset quality continued to perform well, and the provision coverage increased by 10 PCT to 532%. The non-performing loan ratio at the end of 2021 was 0.81%, unchanged from the end of the third quarter, and remained at a low level. The provision coverage rate was 531.98%, about 10 PCT higher than that at the end of the third quarter, and the risk offset capacity was further enhanced.
Deeply cultivate “small and scattered” in Jiangsu, and the investment and management Rural Bank model opens up growth space. We are optimistic about Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) for a long time. Specifically:
First, the company has a clear strategic positioning, adheres to “small and scattered”, and has begun to strengthen the layout of credit insurance business in recent years, which is conducive to improving the yield of credit assets and realizing the continuous improvement of NIM. The management of the company is stable. Chairman Zhuang Guangqiang and President Xue Wen are excellent leading cadres trained by Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) and can lead the bank’s strategic development steadily and far.
Second, it has obvious location advantages. More than 85% of the company’s credit is invested in Jiangsu Province, with strong guarantee for asset quality. The new non-performing loans to the public were basically cleared, the non-performing rate of retail loans remained below 0.8%, the non-performing rate of personal operating loans remained below 1%, and the subsequent non-performing rate is expected to remain at a low level.
Third, the company’s Pratt & Whitney small and micro business has a deep history, the cross verification of risk control model data is relatively mature, and the customer portrait is accurate. With mature IPC and “credit factory” risk control technology and strong customer manager team, the company has realized the “high growth and low bad” of micro loan business.
Fourth, a unique rural bank model. In recent years, the regulatory authorities have further strengthened the supervision of the remote operation of local corporate banks, while Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) the unique investment management Rural Bank model has opened up space for its remote expansion, and the contribution of rural banks in the group sector is also increasing year by year. At the same time, the micro loan technology with strong replicability also ensures that the asset quality pressure of rural banks is generally controllable.
Earnings forecast, valuation and rating. Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) we have been deeply engaged in Pratt & Whitney small and micro markets for a long time, focusing on retail and small and micro businesses, with good risk control mechanism. In Q4 of 21, the credit supply is “prosperous in both supply and demand”, the interest margin is expected to be stable and good, the asset quality continues to perform well, and the high provision coverage makes the company have a strong risk offset ability. On September 3, 2021, the company’s general meeting of shareholders deliberated and approved the 6 billion convertible bond issuance plan. If the subsequent convertible bond issuance is successfully implemented, it will help to further thicken the core Tier-1 capital and expand the company’s business space. Therefore, we raised the EPS forecast for 2021-2023 to 0.80 yuan (up 0.9%) / 0.93 yuan (up 3.1%) / 1.08 yuan (up 6.9%), and the current stock price corresponding to Pb is 0.97/0.88/0.79 respectively, maintaining the “buy” rating.
Risk tip: the downward pressure on the macro economy is increasing, and the credit easing is less than expected.
