\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Performance summary: Bank Of Hangzhou Co.Ltd(600926) 1 quarter net profit increased by 31.4% year on year, and operating revenue increased by 15.7% year on year; The cost income ratio was 22.30%, an increase of 0.95 percentage points over the same period last year. At the end of the quarter, total assets increased by 4.77%, loans increased by 7.11% and deposits increased by 7.21% compared with the beginning of the year. The non-performing rate at the end of the quarter was 0.82%, the provision coverage rate was 580%, the allocation loan ratio was 4.77%, and the core tier 1 / capital adequacy ratio was 8.17% / 13.08%. The company’s first quarter annual roe16 20%, up 2.44 percentage points year-on-year.
Bank Of Hangzhou Co.Ltd(600926) net profit growth is rising at a high level. It is expected to lead listed banks, with prosperous deposits and loans, excellent asset quality, provision coverage rate of 580%, ranking the leading level in the industry and supporting the sustainability of brilliant performance. We are optimistic about the company’s future regional development advantages and growth. After the core capital is supplemented in place, the business is expected to maintain rapid growth and maintain the buy rating.
Key points supporting rating
Both deposits and loans are booming, and the scale is expected to maintain rapid growth after the core capital is in place
The company’s credit growth in the first quarter was strong, an increase of 7.11% over the beginning of the year. We believe that the company’s regional credit demand is strong. Considering that the company’s core tier 1 capital adequacy ratio (8.17% at the end of the first quarter) restricts the company’s scale expansion to a certain extent, if the convertible bonds are successfully converted into shares for capital replenishment, the scale expansion may have a brighter performance. Deposits increased by 7.21% compared with the beginning of the year, enterprise / individual / deposit and other deposits increased by 5.6% / 9.8% / 4.7% respectively compared with the beginning of the year, and demand / time deposits increased by 7.3% / 9.0% compared with the beginning of the year.
The decline in interest rate spread slowed down
According to the calculation, the interest rate spread in the first quarter narrowed by 1bp compared with the fourth quarter of 2021, and the decline slowed down. Among them, the asset side yield decreased by 9bp and the liability side cost rate decreased by 8bp. Looking forward to the follow-up, retail credit is expected to accelerate, superimpose the promotion of the company’s small and micro businesses, and the decline in asset side yield may narrow.
Coronation of asset quality and overall improvement of indicators
The NPL ratio at the end of the first quarter continued to decline 4bp to 0.82% compared with the end of 2021, and the estimated NPL generation rate in the first quarter was 0.11%. The proportion of concerned loans at the end of the first quarter was the same as that at the beginning of the year, at 0.38%; Loans overdue for more than 90 days / NPLs were 64.17% (vs 64.75% at the end of 2021). The company’s provision coverage ratio further increased by 12 percentage points to 580% compared with the beginning of the year, maintaining the forefront of listed banks.
Valuation
Maintain the company’s forecast of EPS of 1.95/2.38 yuan in 2022 / 2023, and the current share price corresponds to Pb of 1.10x/0.98x in 2022 / 2023, maintaining the buy rating.
Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Regulatory control exceeded expectations.
