\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 229 Bank Of Shanghai Co.Ltd(601229) )
Matters:
Bank Of Shanghai Co.Ltd(601229) released the first quarter report of 2022. In the first quarter of 2022, the operating revenue was 14.23 billion yuan, with a year-on-year increase of 2.9%, and the net profit attributable to the parent company was 5.85 billion yuan, with a year-on-year increase of 5.4%, with an annualized roe12.5% 44%, up 0.64pct from the beginning of the year. At the end of the first quarter, the total assets were 2.76 trillion yuan, an increase of 3.95% over the beginning of the year.
Ping An View:
Profit growth slowed, and wealth management dragged down the middle income Bank Of Shanghai Co.Ltd(601229) in the first quarter, the net profit attributable to the parent company increased by 5.4% (vs 5.5%, 2021) year-on-year, the growth rate remained stable, and the external environmental impact was effectively controlled. From the revenue side, the revenue increased by 2.9% (vs + 10.8%, 2021), and the growth rate decreased, which was mainly dragged down by the middle income. In the first quarter, the net interest income maintained a steady growth of 1.9% year-on-year (2021 + 1.1%). 2) In the first quarter, the net income from handling fees and commissions increased by 3.5% (vs + 61.3%, 2021) year-on-year. The decline in growth rate is expected to be mainly due to the decline in the growth rate of wealth management income. In the first quarter, the wealth management income increased by 7.18% (vs + 32.12%, 2021) year-on-year. In addition, the company’s retail AUM increased by 2.15% compared with the beginning of the year, and the Aum of pension customers increased by 2.58% compared with the beginning of the year, still maintaining a stable growth rate, driving the income of financial asset management fees to increase by 20.7% year-on-year. In March, Shangyin financial management was approved to open. With the recovery of offline business after the epidemic in Shanghai, considering the location advantages of the company and the regional competitiveness of pension finance, Bank Of Shanghai Co.Ltd(601229) there is still a large growth space in the wealth management market in the future.
The interest rate spread decreased slightly month on month, and the assets expanded steadily. The company’s interest margin in the first quarter was 1.71%, down 3bp from the beginning of the year, which is expected to be mainly dragged down by asset side pricing. In terms of asset negative structure, the company maintained stable expansion and further optimized its structure. At the end of the first quarter, its total assets increased by 8.1% (vs7.8%, 2021), of which loans increased by 9.5% (vs11.4%, 2021), accounting for 45.6% of total assets, down 0.5pct compared with the beginning of the year, deposits increased by 9.4% (vs11.8%, 2021), accounting for 58.7% of liabilities, down 0.6pct compared with the beginning of the year. Looking forward to the future, as there is still downward pressure on the asset side, the inflection point of interest rate difference needs to be observed.
The asset quality is stable and improving, and the anti risk ability is further improved Bank Of Shanghai Co.Ltd(601229) the non-performing rate at the end of the first quarter was 1.25%, which was the same as that at the beginning of the year. We calculated that the annualized non-performing rate of the company in the first quarter was 1.33%, a year-on-year decrease of 4bp, and the margin of non-performing pressure was relieved to maintain a low level in the industry. In terms of forward-looking indicators, the company’s concern rate at the end of the first quarter was 1.60%, down 5bp from the beginning of the year, the lowest level in 15 years. On the whole, the performance of the company’s asset quality remained stable. At the end of the first quarter, the provision coverage rate of the company was 303.6%, increased by 2.47pct month on month, the loan allocation ratio was 3.79%, and increased by 3bp month on month. Under the background that the performance of the company’s asset quality remained stable, the risk resistance ability was continuously strengthened, which provided strong support for the growth of revenue after the recovery of the epidemic.
Investment suggestion: with significant location advantages, we are optimistic about the steady progress of wealth management transformation Bank Of Shanghai Co.Ltd(601229) continuously plough into key areas such as the Yangtze River Delta, Guangdong, Hong Kong and Macao, Beijing, Tianjin and Hebei, with obvious location advantages, and the good credit environment in the coverage area also provides a stable source of income for the company. On the other hand, Bank Of Shanghai Co.Ltd(601229) strives to create differentiated competitive advantages, focusing on the three main lines of consumer finance, wealth management and pension finance. The number of pension customers has always remained the first in Shanghai. It is expected that with the easing of the epidemic, economic repair and the recovery of consumer credit demand, the company’s profits are expected to continue to repair. Combined with the company’s first quarterly report, we maintain the company’s profit forecast for 22-24 years, with corresponding EPS of 1.71/1.92/2.16 yuan and corresponding profit growth rate of 10.5% / 12.1% / 12.4% respectively. At present, the Pb of Bank Of Shanghai Co.Ltd(601229) corresponding to 22 / 23 / 24 years is 0.46x/0.42x/0.38x respectively. The valuation level of the company is still at the bottom of the history, with limited downside space and sufficient margin of safety, maintaining the “recommended” rating.
Risk tips: 1) macroeconomic downturn leads to higher than expected pressure on asset quality of the industry. 2) The decline in interest rates led to a narrower than expected industry interest margin. 3) The increase of cash flow pressure of real estate enterprises leads to the rise of credit risk.
