\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Key investment points
Highlights of quarterly report: 1. Revenue increased by more than 15%, and net profit increased by more than 30%. In the first quarter, driven by the good start of credit and other non interest income, the revenue increased by 15.7% year-on-year; The asset quality continued to improve, the provision provision provision remained relatively stable, and the year-on-year growth rate of net profit exceeded 30%. 2. Deposits and loans made a good start in the first quarter. Credit 1q22 increased by 41.85 billion in a single quarter, with a month on month growth rate of 7.1%, of which 86% were new to the public, and the proportion of total loans increased by 1 percentage point to 43.3%; Deposits on the liability side increased by 7.2% month on month, mainly due to the force on corporate deposits, which increased by 47.3 billion month on month, and the proportion of deposits increased by 1.4 percentage points to 65%. 3. Credit risk indicators continued to improve. Non performing: the non-performing rate continued to decline 4bp to 0.82% month on month at a low level, maintaining the low level since 2012. The concern category accounts for 0.38%, which is flat at the low level month on month, and there is little adverse pressure in the future. The annualized net generation rate of non-performing products in a single quarter was 0.10%, down 25bp month on month, and remained low overall. Provision: the company’s provision coverage is 580.08%. 4. In the first quarter, net non interest income increased by 50.8% year-on-year, supported by net handling fee income and net other non interest income. Among them, the net handling fee income increased by 20.1% year-on-year, mainly due to the increase of handling fees such as financial services. Net other non interest income increased by 50.8% year-on-year, and the investment income achieved a good growth, with an income of 1.41 billion in a single quarter.
Insufficient quarterly reports: the annualized net interest margin in a single quarter decreased 2bp to 1.53% month on month. This is mainly because the asset side yield is under certain pressure. The asset side yield is down 8bp month on month. It is expected to be mainly affected by loan pricing. In terms of structure, driven by the good start in the first quarter, the proportion of loans in interest bearing assets increased by 1 percentage point month on month. In the future, with the end of the epidemic, the demand on the asset side will pick up, and the acceleration of retail credit will drive the return on the asset side to rise; The reduction of the upper limit of deposit pricing on the liability side can continue to slow down the cost of deposits, the interest rate of market funds can slow down the cost of active liabilities, and the interest margin is expected to stabilize and recover.
Investment suggestion: company 2022e, 2023epb1 08X/0.96X； PE8. 66x / 7.47x (City Commercial Bank pb0.72x / 0.64x /; pe6.02x / 5.30x), the company has stable operation, excellent asset quality and high safety margin. With significant regional advantages, the company takes Hangzhou as its base and fully infiltrates Zhejiang Province. The six branches are strategically deployed in developed economic circles such as the Yangtze River Delta, the Pearl River Delta and the Bohai Bay, further opening up the development space of the company. Large retail financial business also has growth soil, including the growth of consumer credit on the asset side and the development of wealth management business on the capital side. It is recommended to pay active attention.
Risk tip: the macro economy is facing downward pressure, the company’s deposit competition is facing pressure, and the operating performance is less than expected.
