\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 988 Bank Of China Limited(601988) )
Highlights of quarterly report: 1. Both deposits and loans are booming, driving the optimization of asset negative structure. Credit grew well in the first quarter, adding 834.7 billion in a single quarter, an increase of 5.33% month on month, and the proportion of loans rose to 61.98%, a new high since 2012. The scale of deposits increased by 5.71% month on month, up 2.21 percentage points to 79.16% compared with the proportion at the end of 21. 2. The asset quality is generally stable. The non-performing rate decreased month on month, and the net generation of non-performing products decreased slightly to 0.58%. The margin of safety remained stable, with provision coverage of 187.54%, up 0.49 percentage points month on month. 3. Capital is endogenous, and the core tier 1 capital adequacy ratio increased month on month. 1q22 core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 11.33%, 13.30% and 16.64% respectively, with a chain comparison of + 3bp, – 1bp and + 11bp.
Insufficient quarterly reports: 1. The annualized net interest margin in Q1 decreased by 3bp month on month. The narrowing of net interest margin on a month on month basis is the result of the combined effect of the decline of asset side income and the increase of liability side cost. The asset side is expected to be affected by repricing. In terms of structure, the loan growth rate remains not weak, and the proportion of interest bearing assets has increased to a new high in 12 years. The liability side is expected to be affected by structural factors. It is expected that the trend of regular deposit in the first quarter will continue to drive the slight increase of comprehensive deposit cost. 2. Net non interest income decreased by 9% year-on-year, including net handling fee income and net other non interest income. The net fee income decreased by 6.8% year-on-year, which is expected to be mainly due to the slowdown in the growth of wealth management income. Net other non interest income decreased by 14.7% year-on-year, mainly due to the significant year-on-year decline in the income from changes in fair value.
Investment suggestion: the current share price of the company corresponds to 2022e and 2023epb0 46X/0.42X； PE4. 22x / 3.94x (pb0.53x/0.49x, pe4.71x/4.39x of state-owned banks). The overall operation of the company is stable and the asset quality performance is stable. The safety margin of the company’s valuation is high, so it is recommended to pay attention.
Note: we adjusted the assumptions of key data such as credit cost according to the data of quarterly report 1, resulting in the adjustment of the profit forecast from 2022 to 2024 compared with the previous period. It is estimated that the operating revenue in 2022 / 2023 will be 594631/644.89 billion yuan (the previous value is 637649/694067 billion yuan respectively); The net profit attributable to the parent company was RMB 232.01/247.97 billion (the previous value was RMB 233864/249608 billion respectively).
Risk tip: the economic downturn exceeded expectations and the company’s operation was less than expected.
