\u3000\u3000 Ping An Bank Co.Ltd(000001) Ping An Bank Co.Ltd(000001) )
Event: on April 26, Ping An Bank Co.Ltd(000001) released the first quarterly report of 2022. The company achieved revenue / profit before provision / net profit of 46.21/33.66/12.85 billion yuan in the whole year, with a year-on-year increase of 10.6% / 13.6% / 26.8% respectively. The weighted average roe was 14.1%, with a year-on-year increase of 1.82pct. Comments are as follows:
Driven by scale, non interest and provision, net profit achieved a high growth rate. 1q22 revenue increased by 10.6% year-on-year; Net profit increased by 26.8% year-on-year, continuing the recovery trend. From the perspective of split profit contribution: on the revenue side, the volume and price increased steadily, and the net interest income maintained a steady growth (year-on-year + 7.3%); Non interest income increased by 18.7% year-on-year, mainly due to the growth of investment income. On the expenditure side, the cost income ratio was 26.2%, a year-on-year decrease of 1.92pct, and the operation quality and efficiency were improved. Under the background of clearing bad debts and sufficient provisions, the provision provision of the company was relatively mild in the first quarter (the credit impairment loss increased slightly by 3.7% year-on-year). On the whole, the scale, non interest income and provision have made a great positive contribution to the profit, driving the net profit to maintain a high increase.
Credit extension and debt structure were optimized, and the net interest margin increased month on month. 1q22 net interest margin was 2.8%, down 7bp year-on-year from 1q21 and up 6BP month on month from 4q21. The improvement in net interest margin on a month on month basis was mainly due to the increase in the rate of return on interest bearing assets (+ 5bp) and the flat cost rate of interest bearing liabilities on a month on month basis. Asset side: the average yield of loans increased by 14bp to 6.1% month on month, mainly due to the increase in the yield of individual loans (month on month + 28bp), or related to the increase in credit card loans (credit card loans increased by 6.2% compared with the beginning of the year, 2.2pct higher than the growth rate of individual loans). Liability side: the average cost rate of interest bearing liabilities remained unchanged at 2.18% month on month, thanks to the optimization of liability structure (the proportion of daily average balance of deposits in daily average balance of interest bearing liabilities increased by 1.98pct to 68.2% compared with the previous year).
The quality of assets remained stable and the provision for safety cushion was tamped. At the end of March, the Ping An Bank Co.Ltd(000001) non-performing loan ratio was 1.02%, unchanged month on month. Among them, the non-performing rate of public real estate was 0.45%, an increase of 0.23 PCT over the beginning of the year, lower than the non-performing rate of corporate loans of 0.28 PCT; The real estate sector is non-performing or still in the upward trend. Considering the low proportion of the company's real estate related loans, the impact on the overall asset quality is expected to be controllable. Forward looking indicators: focus on the loan ratio of 1.41%, down 1bp from the beginning of the year; The overdue loan ratio was 1.62%, up 1bp from the beginning of the year, and the potential non-performing pressure was generally stable. At the end of March, the provision coverage rate was 289.1%, an increase of 0.68 PCT over the beginning of the year; Sufficient provision and sufficient profit release space.
Core logic:
The group has outstanding comprehensive financial advantages. 1) In terms of customer acquisition: the migration of group customers has been continuously promoted to contribute high-quality customer resources to the company. 2) Science and technology: the group attaches importance to science and technology and continues to increase investment. By sharing the group's science and technology resources, it can effectively enable the bank's retail strategic transformation. 3) Products: backed by the group's comprehensive financial advantages, it can provide customers with one-stop financial products and services, and improve customer stickiness through comprehensive operation and cross sales.
Retail transformation has entered a new stage, and private wealth has developed rapidly Ping An Bank Co.Ltd(000001) since 2016, it has carried out strategic transformation of retail business. With the support of group resources and the support of technology and finance, the retail transformation has achieved remarkable results. In 2021 Ping An Bank Co.Ltd(000001) upgraded the retail transformation, put forward the "five in one" new model, integrated retail financial services such as comprehensive bank, AI bank, remote bank, offline bank and open bank, strengthened the scientific and technological empowerment and realized the secondary take-off of retail business. At the end of March, AUM of retail customers reached 3.36 trillion, an increase of 5.6% over the end of the previous year. Private banking business is developing rapidly, and AUM of qualified customers of private banks is 6% to 1.49 trillion compared with the end of last year. The new retail method is expected to drive the rapid growth of middle income, help to optimize the deposit structure and promote the improvement of the company's operating efficiency.
Good corporate deposit growth and strong corporate demand business. Over the past few years, Ping An Bank Co.Ltd(000001) took the initiative to withdraw from industries with excess capacity and high-risk assets, basically cleared the stock of problematic assets, and comprehensively optimized the quality of public assets. At the same time, strictly control the increment, select industries, customers and products, focus on asset light and capital light businesses, and refine and strengthen corporate businesses. With the continuous promotion of the "3 + 2 + 1" corporate strategy, the company's strategic customer base has achieved remarkable expansion effect. While stabilizing the asset quality, it also brings good growth of enterprise demand deposits and promotes the steady decline of debt cost.
Investment suggestion: we believe that Ping An Bank Co.Ltd(000001) "retail wealth + corporate excellence + excellent asset quality" is expected to jointly drive the improvement of profitability. 1) The growth logic brought by the promotion of retail strategy remains unchanged. The group's comprehensive financial and financial technology empowerment helps to further promote retail transformation. Backed by the group, there is still a large space for the comprehensive expansion of retail lines to obtain customers, and the private banking and wealth management business is expected to maintain a high-speed growth trend. After adjusting the customer base, the risk appetite of the retail line is further improved. 2) Under the intensive cultivation of the corporate strategy, it is expected to stabilize the asset quality, so as to realize the weak cyclization of profits. 3) Excellent asset quality, sufficient provision for credit and non credit provisions and sufficient profit margin. It is estimated that the net profit in 2022 / 2023 will increase by 23.8% / 21.5% year-on-year, corresponding to BVPs of 19.10/21.92 yuan / share respectively. Give the company 1.1 times of 2022 Pb, corresponding to the target price of 21.01 yuan / share, and maintain the "strongly recommended" rating.
Risk tip: the economic stall and downturn lead to the deterioration of asset quality; Unexpected changes in regulatory policies, etc.
