\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 169 Bank Of Beijing Co.Ltd(601169) )
Event: on April 29, Bank Of Beijing Co.Ltd(601169) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue and net profit attributable to the parent company reached 66.275 billion and 22.226 billion, with a year-on-year increase of 3.1% and 3.5% respectively; 1q22 achieved revenue and net profit attributable to parent company of 17.622 billion and 7.353 billion, with a year-on-year increase of 2.1% and 6.6% respectively. The non-performing rate at the end of the first quarter was 1.44%, unchanged month on month; The provision coverage rate was 211.5%, an increase of 1.3pct over the end of the year 21; The annual weighted average roe of 1q22 was 13.32%, an increase of 2.98pct over 21 years. Comments are as follows:
The middle income achieved rapid growth, the provision was reduced, and the growth rate of net profit in the first quarter rebounded month on month In Bank Of Beijing Co.Ltd(601169) 2021 and 1q22, the net profit increased by 3.5% and 6.6% respectively year-on-year, and the profit growth picked up. In terms of splitting, the main drivers of profit growth come from the growth of scale, non interest income and the decrease of provision, and the net interest margin is still a drag.
Deeply cultivate the capital’s economic construction and have strong ability to develop industries in other places Bank Of Beijing Co.Ltd(601169) takes root in the economic development of the capital and plays an important role in urban construction, key projects and key industrial development. At the same time, it has deepened its institutional business and gradually strengthened its service characteristics in the fields of finance, social security, medical insurance, taxation, medical treatment, provident fund and other institutional business, forming a differentiated competitive advantage among commercial banks in the region. At the same time, the company has strong ability to expand its business in other places. At the end of 21, the proportion of non local outlets and non local loans reached 60.6% and 56.0%, higher than that of comparable city commercial banks. Outside Beijing, it mainly covers the Yangtze River Delta, Pearl River Delta and other developed regions, with strong regional credit demand. The company has completed the issuance of 60 billion yuan of perpetual bonds, and the capital supplement is in place, which will accelerate the company’s credit supply in developed regions inside and outside Beijing.
Retail transformation continues to accelerate, and “stabilizing interest rate spread and raising medium income” is expected to promote the improvement of profitability. In recent years, Bank Of Beijing Co.Ltd(601169) highlighted the strategic position of retail transformation and increased retail support. Credit supply continued to tilt to retail loans, accounting for 36% of retail loans at the end of 21, with a year-on-year increase of 2.8pct; In particular, the increment of high-yield business loans and consumer loans accounted for 72.1%. The increase in the proportion of retail loans will help stabilize the interest margin and improve the profitability of loan business. At the same time, the transformation and upgrading of wealth management business has accelerated, and a hierarchical customer management system of “gold card platinum wealth private business” has been formed. In the past 21 years, the income of wealth management business has increased by 81.7% year-on-year. The company has obvious advantages in social security, provident fund, medical treatment and other aspects. The foundation of retail customers in Beijing is solid, and the local high net worth people have more room to explore. The development of wealth management business is expected to promote the growth and proportion of middle income.
The digital transformation is advancing steadily and is expected to enable the bank to operate efficiently. The company continued to increase investment in financial technology, accounting for 3.5% of revenue in 2021. Shunyi science and technology R & D center is put into use, and its financial technology companies continue to make efforts; Continue to optimize the organizational structure of science and technology, and make steady progress in digital transformation. Fintech is expected to enable business, improve efficiency in credit approval, risk control, channel sales, data operation and other aspects, and stimulate new momentum of business development.
The risk continues to be cleared and the marginal asset quality is improved. In recent years, Bank Of Beijing Co.Ltd(601169) continued to strengthen the disposal of non-performing assets, accelerated the clearing of stock non-performing assets, and continuously improved the risk control system. At the end of the year, the non-performing loan ratio was 1.44%, a decrease of 13bp compared with the end of the previous year; The new amount of non-performing assets decreased by 2.5 billion over the previous year. It is estimated that the net generation rate of non-performing assets is 1.02%, and the marginal improvement of asset quality. The overdue loan ratio was 1.75%, a decrease of 14bp compared with the end of the previous year, and the potential non-performing pressure was mitigated. With the marginal improvement of asset quality, the pressure of provision provision is expected to decrease gradually; The reduction of credit cost is expected to promote the release of profits. 1q22 credit impairment loss decreased by 15% year-on-year; At the end of March, the provision coverage rate was 211.5%, an increase of 1.3pct over the beginning of the year. At present, the provision level is reasonable and sufficient.
Investment suggestions: Bank Of Beijing Co.Ltd(601169) continue to strengthen the positioning of serving the capital, accelerate the transformation of retail business, continuously optimize the asset liability structure and accelerate the transformation of wealth management business; Risk control continued to be prudent, risks were gradually cleared, and asset quality remained stable; The stock provision is reasonable and sufficient. We expect that the growth rate of net profit attributable to parent company in 2022 / 2023 will be 5.7% / 6.3% respectively, and the corresponding BVPs will be 11.38/12.55 yuan / share respectively. On April 29, 2022, the closing price was 4.57 yuan / share, corresponding to 0.4 times of 22-year Pb. Considering the company’s location advantages, expansion space in different places and performance release space brought by the improvement of asset quality, the “recommended” rating is maintained.
Risk tip: the economic stall and downturn lead to the deterioration of asset quality; Unexpected changes in regulatory policies, etc.
