\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 187 Xiamen Bank Co.Ltd(601187) )
Event:
On April 27, Xiamen Bank Co.Ltd(601187) released the first quarterly report of 2022, realizing operating revenue of 1.367 billion yuan, yoy + 18.2%, net profit attributable to parent company of 627 million yuan, yoy + 16.5%. The weighted average return on net assets is 10.84%, yoy-0.72pct.
Comments:
Revenue growth increased quarter on quarter, with significant support from non interest income. In the first quarter, the company’s operating revenue and net profit attributable to the parent company increased by 18.2% and 16.5% year-on-year respectively, with changes of 22.5 and – 2.5pct respectively compared with 2021, of which the year-on-year growth rates of net interest income and non interest income were 10.5% and 72.4% respectively, with increases of 14.4 and 78.6pct respectively compared with 2021. Split the year-on-year growth structure, with asset scale expansion and non interest income as the main contribution sub items; The negative drag of interest margin narrowed, the negative contribution of expense side widened, and the provision changed from positive contribution to negative contribution. The company’s revenue growth rate in the first quarter further increased. On the one hand, it is related to the low base last year (1q21 revenue growth rate – 16.7%), and the high growth of 22q1 non interest also forms support for the revenue end.
The scale expansion and speed-up have increased the release of bill discount. At the end of 22q1, the total assets of the company increased by 20.0% year-on-year, and the growth rate increased by 4.4pct quarter on quarter. In the first quarter, the new assets increased by 14.318 billion, an increase of 12.892 billion year-on-year. The expansion and acceleration of the company’s statement formed a good support for the net interest income. Among them, loans increased by 6.05 billion, a year-on-year decrease of 3.264 billion, corresponding to the growth rate of loan balance at the end of the first quarter of 20.8%, down 3.7pct from the beginning of the year. In terms of credit structure, new corporate, retail and bills accounted for 35.7%, 22.1% and 42.2% of the new interest bearing assets respectively. At the same time, it is expected that the increase in the growth rate of credit in Fujian will be related to the decline of the company’s demand for notes, which is related to the decline of the macro-economic situation.
The proportion of market liabilities increased. At the end of 22q1, the total liabilities and deposits of the company increased by 20.9% and 26.7% respectively year-on-year, and the growth rate increased by 5.5 and 7.5pct respectively compared with the beginning of the year. The reason why the deposit growth rate increased significantly compared with the beginning of the year is mainly due to the low base effect formed by the negative growth of deposits in the same period of last year. However, in fact, the deposit scale in the first quarter increased by only 0.2% compared with the beginning of the year, and the expansion of the liability side is more driven by market liabilities. By the end of the first quarter of 2022, deposits, bonds payable and inter-bank liabilities accounted for 59.4%, 22.0% and 18.6% respectively, with quarter on quarter changes of – 2.5, – 0.3 and 2.8pct respectively, and the proportion of market liabilities increased.
Nim operation is expected to be under pressure. The company’s net interest income in a single quarter decreased by 8.2% month on month, while the interest bearing assets increased by 4.1% month on month. It is expected that the NIM of the company will decline quarter on quarter. The estimated value shows that the interest margin in the first quarter decreased by about 10bp compared with the beginning of the year. However, this is also the pressure point faced by the whole industry, that is, the contradiction between credit supply and demand increased at the beginning of the year + LPR quotation. Under the background of continuous reduction in December 2021 and January 2022 and the heavy use of refinancing tools, the loan interest rate is facing great downward pressure. At the same time, there is great pressure to increase the stable deposit on the liability side, and the debt cost remains rigid.
Non interest income increased by more than 70%, the proportion of non interest income rose to 18%, and net other non interest income recorded a good performance. 22q1, the company’s non interest income increased by 72.4% year-on-year to 248 million yuan. Among them, the net fee and commission income increased by 21.6% year-on-year to RMB 115 million. Although the fluctuation of the capital market intensified at the beginning of the year, the company’s net fee and commission income remained relatively resilient; Net other non interest income increased significantly year-on-year by 169.6% to 133 million yuan, which was mainly driven by the high year-on-year increase in investment income. Of course, this was affected by the low base effect in the same period of last year (the year-on-year increase of net other non interest income in 21q1 was – 87.2%), which also showed that the company had better grasped the band opportunity.
Asset quality continued to improve, and the provision coverage rate rose to 372%. In the first quarter of 2022, the quality of Xiamen Bank Co.Ltd(601187) assets continued to improve in the early stage, with the non-performing loan ratio of 0.90% and a quarter on quarter decrease of 1bp, which has remained stable below 1% since 2020; The concern rate was 0.83%, the quarter on quarter ratio decreased by 8bp, and the pressure of bad products decreased. The provision coverage rate was 371.6%, increased 1PCT compared with the beginning of the year, and the provision to loan ratio was 3.38%, basically unchanged compared with the beginning of the year. The overall provision level of the company remained stable. In fact, the provision of the company decreased in the first quarter, and the credit impairment loss / average total assets decreased by 0.11pct to 0.23% compared with the beginning of the year. It is expected that the net non-performing generation rate of the company will decrease.
The capital adequacy ratio has declined. At the end of the first quarter of 2022, the company’s core tier 1 capital adequacy ratio / Tier 1 capital adequacy ratio / capital adequacy ratio were 10.19% / 11.42% / 15.62% respectively, with a quarter on quarter decrease of 0.28pct/0.35pct/0.78pct respectively Xiamen Bank Co.Ltd(601187) at the end of the first quarter, the weighted risk assets increased by 5.5% compared with the beginning of the year, and the loans increased by 3.5% compared with the beginning of the year. The expansion of the asset side consumed some capital formation.
Earnings forecast, valuation and rating Xiamen Bank Co.Ltd(601187) is one of the most comprehensive urban commercial banks in Fujian Province. With strong economic development in Haixi Economic Zone, the company’s business location advantages are prominent. At the same time, the company has excellent asset quality and high provision coverage, which makes the company have strong risk offset ability. In the future, considering that the “steady growth” policy is expected to continue to be introduced to promote the realization of this year’s economic growth target, we maintain the company’s EPS forecast of 0.95 yuan / 1.08 yuan / 1.20 yuan from 2022 to 2024, and the current stock price corresponding to Pb valuation is 0.69/0.63/0.57 times respectively, maintaining the “overweight” rating.
Risk tip: if the macro economy goes down more than expected, it may increase the potential risk of large risk exposure.
