\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 166 Industrial Bank Co.Ltd(601166) )
Net profit in the first quarter increased by 15.62% year-on-year, and roe increased year-on-year. In the first quarter of 2022, the revenue was 59.4 billion yuan (+ 6.7%), and the net profit attributable to the parent company was 27.6 billion yuan (+ 15.6%). The annualized roe was 18.04%, with a year-on-year increase of 0.44 percentage points. In the first quarter, the company’s profit before provision decreased by 0.1% year-on-year, and the high growth of net profit attributable to the parent mainly benefited from the year-on-year decrease of 28.1% in asset impairment loss after the improvement of asset quality.
Non interest income achieved good growth, and business and management fees increased significantly. Net interest income increased by 2.4% in 2021, mainly due to the year-on-year narrowing of net interest margin. Under the impact of LPR reduction, policy guidance and profit making entities, and intensified asset competition under the downward pressure of the economy, the return on assets of the company has declined. In the first quarter, the company’s non interest net income increased by 15.1%, accounting for 36.4% of operating revenue. Among them, the net income of handling fees and commissions increased by 18.8%, accounting for 22.4% of operating revenue. It is expected to mainly come from the growth of asset management business income and investment banking business income. The investment in science and technology and related business increased by 25.5% year-on-year, mainly due to a year-on-year increase in the cost of customer construction and related business by 25.5%.
Deposits and loans maintained steady growth, and the trend of regular deposits was obvious. Loans increased by 4.5% in the first quarter, achieving a good growth. In terms of structure, corporate loans and personal loans expanded by 8.3% and 1.2% respectively, and bill discount decreased by 1.6%. In the first quarter, the deposit increased by 2.2%, and the deposit periodization was more obvious. Among them, demand deposits decreased by 2.2% over the beginning of the year, accounting for 39.2% of the total deposits, a decrease of 1.8 percentage points over the beginning of the year. At present, the trend of regular deposit in the industry is more obvious, which also puts some pressure on the deposit cost of banks.
The quality of assets is stable. The non-performing rate at the end of the period was 1.10%, the same as that at the beginning of the year; The attention rate was 1.50%, down 0.02 percentage points from the beginning of the year. However, the non-performing balance increased by 4.4% compared with the beginning of the year, and the balance of special loans increased by 2.8% compared with the beginning of the year. It is expected that the epidemic in the first quarter will have a certain impact on some regions and industries. We calculated that the cost of credit risk in the first quarter was 1.02%, a year-on-year decrease of 0.56 percentage points and 0.57 percentage points lower than that in 2021. However, benefiting from the stable asset quality, the company’s provision coverage at the end of the period was 268.9%, unchanged from the beginning of the year.
Investment suggestion: maintain the profit forecast and maintain the “overweight” rating.
The company’s performance is in line with expectations, and we maintain our profit forecast unchanged. It is estimated that its net profit from 2022 to 2024 will be 93.8 billion yuan / 106.1 billion yuan / 118.4 billion yuan, with a year-on-year increase of 13.4% / 13.1% / 11.7%, corresponding to diluted EPS 4.5% 51 yuan / 5.11 yuan / 5.70 yuan. The dynamic PE corresponding to the current stock price is 4.7x/4.1x/3.7x and Pb is 0.65x/0.58x/0.52x, maintaining the rating of “overweight”.
Risk tips: 1. The epidemic situation is repeated, and the steady growth policy is less than expected, resulting in lower than expected economic recovery; 2. The risk exposure in the real estate sector exceeded market expectations.
