\u3000\u3 Shengda Resources Co.Ltd(000603) 323 Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) )
Highlights of financial report: 1. 1q22 revenue accelerated recovery, and net profit remained 20% + high growth. In 2021, the annual revenue and PPOP growth continued to rise slightly, and the recovery accelerated in the first quarter. PPOP increased by 9% year-on-year; Under the excellent asset quality, the provision provision provision remained stable on the whole, and the year-on-year growth rate of net profit remained above 20%, 22% and 21% respectively year-on-year. 2. 1q22 net interest income was + 22.6% month on month, with both volume and price rising. At the same time, it was affected by the low base in the fourth quarter. In terms of scale growth, it increased by 3.6% month on month in the first quarter. The asset spread rose from q205 to 322.05%. 3. In the fourth quarter, corporate loans continued to maintain good growth, driving the total loan scale to remain stable. In the first quarter, the growth rate of personal loans picked up, supporting the loan growth of 3.5% month on month. Loan 4q and 1q increased by 3.16 billion and 3.33 billion respectively in a single quarter, with a month on month increase of + 3.4% and 3.5%, of which corporate growth remained stable in the first quarter, with a month on month increase of + 3.3%, and retail loan growth picked up, with a single quarter increase of 1.01 billion, with a month on month increase of + 4.1%, accounting for 45% and 15.6% of interest bearing assets. 4. Excellent asset quality. The company’s recognition of non-performing loans is very strict, with only 28% of non-performing loans overdue for more than 90 days and 49% of non-performing loans overdue. On this basis, the company’s non-performing rate continued to decline to 0.99%. Concern loans accounted for 2.41%, the best level since 2015. The provision coverage rate is 420%, and the risk offset ability continues to maintain an excellent level. 5. Suzhou urban strategy continued to advance. In 2021, the proportion of credit business in Suzhou urban area (excluding Wujiang) increased from 10.60% to 16.61%, an increase of 6.01 percentage points; In 2022, in Q1, the proportion of Suzhou urban area (excluding Wujiang) will further increase by 0.60 percentage points to 17.21%.
Investment suggestion: 2022e, 2023epb0 66X/0.60X； PE6. 70X / 5.67x (rural commercial bank pb0.67x / 0.61x; pe6.52×6.84x). Based in Suzhou economic zone, the company’s deposit and loan business continued to increase, the contribution of deposit and loan and revenue of retail business continued to improve, and the asset quality was further consolidated. With the stabilization and recovery of the company’s interest margin and the continuous promotion of Suzhou urban strategy, it is suggested to pay active attention.
Adjustment of profit forecast: according to the 2021 annual report and the first quarterly report, we adjust the profit forecast. It is estimated that the operating revenue in 2022 / 2023 / 2024 will be 4.466/51.70/5.936 billion yuan (the previous value is 4.763/53.21 / – billion yuan), with a growth rate of 16.4% / 15.7% / 14.8%; The net profit attributable to the parent company was 1.392/1.644/1.933.9 billion yuan (the previous value was 1.133/1.267/ – billion yuan), with a growth rate of 20.0% / 18.1% / 17.6%. Adjustment of core assumptions: 1 Considering that the policy continues to guide financial institutions to transfer profits to entities and the net interest margin of the industry is under pressure, the corporate loan yield is adjusted to 5.00% / 5.00% / 5.00%; The bond investment yield is 2.80% / 2.80% / 2.80%. 2. The company’s deposits are facing competitive pressure, and the interest payment rate is adjusted to 2.00% / 2.00% / 2.00%. 3. The quality of the company’s assets is good, the provision is weakened, and the provision expenditure / average loan is adjusted to 1.44% / 1.32% / 1.27%.
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.
