\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 838 Bank Of Chengdu Co.Ltd(601838) )
Performance summary: Bank Of Chengdu Co.Ltd(601838) publishes the annual report of 2021 and the quarterly report of 2022. In 2021, the net profit attributable to the parent company increased by 30.0%, the operating revenue increased by 22.5% year-on-year, the total assets, loans and deposits increased by 17.8%, 37.2% and 22.3% year-on-year, and the roe increased by 1.66 percentage points year-on-year to 17.60%. In the first quarter of 2022, the net profit attributable to the parent company increased by 28.8% year-on-year, the operating revenue increased by 17.7% year-on-year, the total assets, loans and deposits increased by 9.0%, 7.9% and 10.5% year-on-year, and the annualized roe in the first quarter increased by 1.96 percentage points year-on-year to 18.32%. The non-performing rate of 2021 / 2022q1 is 0.98% / 0.91% respectively, the provision coverage rate is 403% / 436% respectively, and the core tier 1 capital adequacy ratio is 8.70% / 8.34% respectively.
Bank Of Chengdu Co.Ltd(601838) is expected to continue to benefit from the advantages of regional economic environment and the construction of Chengdu Chongqing double city economic circle. The scale expansion may strongly support the high performance growth. The asset quality of the company has been continuously improved, the low cost of the liability side supports the low-risk preference of the asset side, forms a virtuous circle of liability, asset and asset quality, and strengthens the certainty of Bank Of Chengdu Co.Ltd(601838) profit. High growth scarce target, the first target, pay attention to the process of debt to equity swap.
Key points supporting rating
The profit continued to improve and the performance maintained high growth
Bank Of Chengdu Co.Ltd(601838) q in 2021 and 2022q1, the net profit increased by 30.0% and 28.8% respectively year on year, driving the steady growth of roe and roa. Quarterly annualized roe18 32%, with a year-on-year increase of 1.96 percentage points; Annualized ROA1 07%, a year-on-year increase of 9bp. Driven by scale expansion, the company’s net interest income in 2021 / 2022q1 achieved a year-on-year growth rate of 21.9% / 19.4%. Although the year-on-year growth rate of net interest income in the first quarter was slightly slower than that in 2021, it was still at a better level for listed banks. The net fee income from 2021 / 2022q1 performed well, with a year-on-year increase of 45.5% and 29.0% respectively, mainly contributed by the income from financial management and asset management business. In 2021, financial management and business income increased by 71% year-on-year, accounting for 63% of handling fee income. The company’s excellent asset quality and light provision pressure have made a positive contribution to the performance. The scale of 2021 / 2022q1 loss increased by 17% / – 10% year-on-year. In terms of the loss provision scale in 2021, the provision scale of loans and non credit assets accounted for 84% / 16% respectively.
Valuation
We raised the EPS of Bank Of Chengdu Co.Ltd(601838) 2022 / 2023 to 2.71/3.29 yuan (formerly 2.48/2.95 yuan), the corresponding net profit growth rate was 25.1% / 21.4%, and the corresponding price to book ratio of the current stock price was 1.09/0.94x, maintaining the rating of “overweight”.
Main risks of rating
Repeated epidemics and economic downturn have led to the deterioration of asset quality beyond expectations; Regulatory control exceeded expectations.
