\u3000\u3000 Ping An Bank Co.Ltd(000001) (000001)
Business growth is upward and performance growth is downward
The company released the performance express for 2021. The annual revenue and net profit attributable to the parent company were RMB 169.383 billion and RMB 36.336 billion respectively, with a year-on-year increase of 10.32% and 25.61%, an increase of 1.20 PCT and a decrease of 4.47 PCT compared with the first three quarters. The annual weighted average roe reached 10.85%, with a year-on-year increase of 1.27pct. Although the company’s performance growth slowed down, it still maintained a high level. We expect that the year-on-year growth rate is still in the forefront of listed banks. In addition, revenue growth continued to rise, showing a more real performance and releasing confidence. At the same time, the better release of profits is also conducive to the company’s endogenous capital supplement.
Orderly credit expansion, focusing on debt side optimization
At the end of 21q4, the total assets of the company increased by 10.13% year-on-year, with a year-on-year growth rate of 1.51pct lower than that at the end of Q3; Loans and advances increased by 14.90% year-on-year, with a year-on-year growth rate of 0.33pct lower than that at the end of Q3. The expansion rate of credit supply was higher than that of total assets and maintained a relatively stable trend. At the end of 21q4, the company’s deposit balance increased by 10.80% year-on-year, with a year-on-year growth rate of 3.85pct lower than that at the end of Q3, but still higher than the year-on-year growth rate of total liabilities.
With the development of wealth management business, residents’ savings move, and banks are facing certain pressure to collect savings. In the past, the cost of Ping An Bank Co.Ltd(000001) deposits was higher than that of major comparable peers, which has improved greatly in recent years. The company has incorporated liability management into the strategic height of the whole bank. On the corporate side, we will increase investment in transaction bank resources and increase demand deposits for settlement; And retail continued to expand AUM, driving the precipitation growth of demand deposits.
The non-performing rate was continuously optimized and the asset quality was consolidated
At the end of 21q4, the company’s non-performing rate fell 3bp to 1.02% month on month, a new low in seven years, continuing the downward trend of non-performing rate in recent three years. The deviation of loans overdue for more than 60 days was 0.85, mom + 0.04, but it was still lower than the level at the beginning of the year. Under the background of corporate business reconstruction and retail transformation, the company has continuously optimized the credit asset structure and consolidated the asset quality. In addition, the company’s risk offset ability continued to improve, and the provision coverage at the end of Q3 increased by 20.06pct to 288.41% month on month, a new high in 10 years.
In 2022, under the broad credit environment, the bank’s credit risk is expected to be further resolved, and the risk exposure pressure will be weakened. In addition, wide credit is also conducive to the expansion of bank non interest business, especially wealth management business. Over the years, the company has achieved remarkable results in retail transformation, and will fully benefit from the wide credit environment in 2022.
Investment suggestion: the wealth management business is getting better and better, and the performance contribution is expected to accelerate
Wealth management business is becoming more and more important to banks. The company’s new three-year goals have strong demands on AUM scale, and the new three-year wealth management is inseparable from the support of the group’s ecosystem. In accelerating integration into the group’s ecology, the company enjoys the benefits of acquiring customers (MGM, vehicle ecological user transformation, etc.) and storing customers (the group provides comprehensive financial services with multi license resources). With the in-depth promotion of the company’s retail high-level transformation, the contribution of wealth management performance is expected to accelerate. We are optimistic about the company’s future profit release. Considering that the company pays more attention to the balance between performance release and provision, we adjusted the growth rate of net profit attributable to the parent company from 2022 to 2023 to 15.99% and 18.08%. Give 1.4x target Pb in 2022, corresponding to the target price of 26.35 yuan, and maintain the “buy” rating.
Risk warning: weak macro economy, insufficient credit demand and fluctuation of credit risk; The express is the preliminary accounting data, and the final disclosure is the annual report
