\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 128 Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) )
The performance growth rate is higher and the profitability is strong
The company disclosed that in the first quarter report of 2022, the revenue and net profit attributable to the parent company increased by 19.34% and 23.38% year-on-year, and the year-on-year growth rate increased by 3.03pct and 2.04pct compared with the whole year of 2021. Among them, the net interest income increased by 23.97% year-on-year, and the year-on-year growth rate increased by 11.82pct compared with the whole year of 2021, mainly due to the strong demand for credit. 22q1 weighted average roe reached 13.05%, with a year-on-year increase of 1.36pct, and the profitability continued to improve.
Both deposits and loans are booming, and the net interest margin keeps rising
The company’s 22q1 net interest margin reached 3.09%, an increase of 3bp compared with the whole year of 2021, and basically maintained the recovery trend since 21q4. The credit supply of 22q1 company maintained a high growth, and the year-on-year growth rate of loans at the end of the period was as high as 24.06%, which was 0.47pct higher than that at the end of 21q4. 22q1 company increased its loans by 10.323 billion yuan, an increase of 2.498 billion yuan year-on-year, of which corporate loans increased by 1.347 billion yuan year-on-year, and retail loans were basically the same as the same period last year. At the end of 22q1, the company’s deposits increased by 15.39% year-on-year, with a year-on-year growth rate of 0.31pct higher than that at the end of 21q4. 22q1 new deposits reached 21.52 billion yuan, an increase of 3.3 billion yuan year-on-year. The company continued to consolidate the advantages of small and micro businesses. At the end of 22q1, the balance of personal operating loans increased by 34% year-on-year, and the amount of loans in a single quarter increased by 643 million yuan year-on-year. The company has kept a balance in terms of small and scattered strategy and risk management. At the end of 22q1, the average retail loan household reached 268200 yuan, an increase of 24.9% year-on-year, an increase of 2.6% over the whole year of 2021, of which the personal operating loan increased by 4.6% and decreased by 2% respectively.
Solid asset quality and high provision coverage
The non-performing rate of the company at the end of 22q1 was 0.81%, which was the same as that at the end of 21q4, and the proportion of concerned loans increased slightly by 5bp to 0.94%. The total proportion of non-performing loans and concerned loans remains low, and the overall asset quality is relatively solid. The provision coverage rate at the end of 22q1 reached 532.73%, an increase of 0.91pct compared with that at the end of 21q4, the highest level in history. The provision thickness continued to increase, enhancing the ability of risk offset and profit feedback.
Endogenous and exogenous sources supplement the core Tier-1 capital to lay a good lead for asset expansion
By the end of 22q1, the company’s core tier 1 capital adequacy ratio was 10.01%, down 20bp from the end of 21q4, still at a high level. Over the past two years, the year-on-year growth rate of corporate loans has been basically maintained at about 20%, and the consumption of core tier 1 capital is rapid. However, the rapid release of performance helps to improve the endogenous growth capacity of capital. In addition, the company’s convertible bonds have been accepted by the CSRC. The static calculation of 6 billion yuan of convertible bonds can improve the core Tier-1 capital adequacy ratio by 2.87 PCT, and the supplement of endogenous and exogenous capital can lay a good advance for the expansion of the company’s assets.
Investment suggestion: lay a solid foundation for the whole year in the first quarter, and the high growth of performance is expected to continue
The active private economy in the region has spawned a strong demand for credit. The company clearly adheres to the market positioning of serving “agriculture, rural areas and farmers” and small and micro enterprises. Small and micro businesses have obvious first mover advantages. Over the years, a perfect small and micro financial service system has been formed. At the same time of business expansion, strictly control credit risk and constantly consolidate asset quality. The “red” opening in the first quarter laid a good foundation for the credit supply throughout the year. With the weakening of the impact of the epidemic, it is expected to maintain a rapid credit supply in the follow-up. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will increase by 21.31%, 19.26% and 17.23% year-on-year. At present, the company’s corresponding Pb (LF) is 1.13 times, giving 1.4 times the target Pb in 2022, corresponding to the target price of 11.12 yuan, maintaining the “buy” rating.
Risk warning: macroeconomic downturn, insufficient demand for small and micro credit, credit risk fluctuation,
