\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 288 Agricultural Bank Of China Limited(601288) )
Quarterly summary: Agricultural Bank Of China Limited(601288) 2022 first quarter net profit of 70.6 billion yuan, an increase of 6.7%. The performance growth mainly comes from the contribution of scale and provision. Among them, the net interest income increased by 7.75%, the net fee income increased by 4.27%, other non interest income decreased by 2.7% and the operating income increased by 5.9% year-on-year; Total assets increased by 6.3%, loans increased by 5.7% and deposits increased by 7.3% over the beginning of the year. The non-performing rate was 1.41%, the provision coverage rate was 307.5%, and the core tier 1 capital adequacy ratio was 11.36%.
1. The quarterly interest income and fee income performed well. The company’s customer base advantage was significant, the county advantage was continuously improved, and the business continued to improve. The company’s valuation was pb0.5 in 202246x, the dividend yield is 6.8%, the long-term value is prominent, and the relative valuation also has room for improvement.
Key points supporting rating
1. Both quarterly interest income and fee income performed well
in the first quarter of 2022, the net interest income increased rapidly, the handling fee income maintained positive growth, the asset quality was stable, the provision remained at a high level, and the performance was better than that of comparable peers. First, the scale grew rapidly. Under the pressure of interest margin, it ensured a good growth of net interest income. In the first quarter, the net interest income increased by 7.7% year-on-year and 1.8% month on month compared with the fourth quarter of last year, which was relatively better than that of comparable peers. Second, the net fee income increased by 4.3% year-on-year. Under the market pressure, the fee continued to grow and the relative performance continued to be good. Third, the non-performing rate was 1.41%, a decrease of 2bp over the previous year, the provision coverage rate was 307.5%, and the allocation loan ratio was 4.32%, both of which increased at high levels. At the same time, we are also concerned that the interest margin continues to be under pressure, and other non interest rates of the company have decreased by 2.7%, which has a certain suppression on income growth.
The advantages of the county continued to improve, the county scale grew rapidly, and the asset quality remained stable.
The total amount of county loans was 6656519 billion yuan, an increase of 7.05% over the end of the previous year, accounting for 36.7%. County deposits reached 10130468 billion yuan, an increase of 7.62% over the previous year, accounting for 43.1%. At the end of the year, the provision rate for other business was 97.04%, which was higher than that of the previous year, and the provision rate for other non-performing assets was 1.87%, which was higher than that of the previous year.
Valuation
We give the company’s EPS to 0.75/0.81 yuan in 2022 / 2023. At present, the share price corresponds to 0.46/0.41 times of Pb in 2022 / 2023, maintaining the overweight rating.
Main risks of rating
The deterioration of asset quality caused by economic downturn exceeded expectations; Financial regulation exceeded expectations.
