\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
Core view
The net profit attributable to the parent company in the first quarter increased by 23.4% year-on-year. In the first quarter of 2022, the revenue was 2.13 billion yuan (+ 19.3%), and the net profit attributable to the parent company was 660 million yuan (+ 23.4%). The annualized ROA was 1.10% and the annualized roe was 12.19%, with a year-on-year increase of 0.03 and 1.12 percentage points respectively.
The net interest income increased sharply and the handling fee income fell sharply. In the first quarter, the company’s net interest income increased by 24.0% year-on-year, the highest growth rate since 2017, benefiting from the widening net interest margin and rapid growth in scale. However, the company’s net fee income in the first quarter was only 54 million yuan, compared with 8.219 billion yuan in the same period last year, which was mainly affected by factors such as the recognition frequency of financial business income, which was also the reason why the growth rate of revenue in the first quarter decreased compared with that from January to February. In the first quarter, other non interest income increased by 33% year-on-year, achieving a good growth, accounting for 13.2% of revenue.
Net interest margin rose 3bps month on month, and loans maintained high growth. The company’s net interest margin in the first quarter was 3.09%, an increase of 3bps compared with the whole year of 2021. With the continuous deepening of the company’s small and scattered strategy, the net interest margin has continued to rebound since the bottom in the second quarter of 2021, from 3.02% in the first half of 2021 to 3.09% in the first quarter of 2022. With the enhancement of the competitiveness of small and micro businesses, there is still room for rise in the net interest margin in the future.
Loans increased by 6.3% in the first quarter, of which corporate loans increased by 10.4%, retail loans and personal operating loans increased by 3.1% and 2.7% respectively, which is related to the seasonal manipulation of credit investment. The investment of personal operating loans will be increased in the second half of the year. Deposits increased by 11.2% in the first quarter. The first quarter was an important period for the company to collect deposits. The higher deposit growth rate provided the basis for subsequent credit growth.
Excellent asset quality and high provision coverage. The non-performing rate at the end of the period was 0.81%, the same as that at the beginning of the year, and the attention rate was 0.94%, an increase of 5bps over the beginning of the year. The epidemic had little impact on the company’s asset quality, the non-performing rate and attention rate were at a low level, and the asset quality was excellent. Under the low base factor, the company’s asset impairment loss in the first quarter increased by 30.0% year-on-year, and the calculated annualized credit cost rate was 1.08%, which decreased by 6bps compared with 2021 and increased by 5bps year-on-year. At the end of the period, the company’s provision coverage was 532.7%, a slight increase of 0.9 percentage points over the beginning of the year, and the absolute level was in the forefront of the industry.
Investment advice: maintain the profit forecast and maintain the “buy” rating.
The company’s performance is excellent. With the deepening of the strategy of becoming small and scattered, the competitiveness of small and micro enterprises continues to increase. Considering that the company’s provision coverage is at a high level and the need for significant provision in the future decreases, it is expected that the roe center is expected to rise. Maintain the forecast of net profit of RMB 2.66/3.20/3.75 billion from 2022 to 2024, with a corresponding increase of 21.7% / 20.4% / 17.1% and EPS of RMB 0.97/1.17/1.37. The dynamic PE corresponding to the current stock price is 7.4x/6.1x/5.2x, and the dynamic Pb is 0.91x/0.82x/0.73x, maintaining the “buy” rating.
Risk tip: the epidemic situation is repeated, the steady growth policy is less than expected, and the economic recovery is lower than expected.
