\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 825 Shanghai Rural Commercial Bank Co.Ltd(601825) )
Core view
The performance of the annual report grew steadily, and the growth rate of net profit in the first quarter rebounded. In the first quarter of 2021 and 2022, the operating revenue was 24.2 billion yuan and 6.4 billion yuan, with a year-on-year increase of 9.6% and 9.1% respectively; In the first quarter of 2021 and 2022, the net profit attributable to the parent company was 9.7 billion yuan and 3.11 billion yuan, with a year-on-year increase of 18.8% and 29.1%, mainly due to the reduction of the pressure on provision provision under the condition of base factor and improvement of asset quality. The two-year average growth rate of net profit attributable to parent company in the first quarter of 2021 and 2022 was 4.7% and 13.6% respectively, of which the year-on-year or two-year average growth rate in the first quarter rebounded significantly. The weighted average roe11 in 2021 4%, up 0.4 percentage points year-on-year.
The scale expanded steadily, and the advantages of deposits were further highlighted. In 2021 and the first quarter of 2022, the total assets increased by 9.6% and 9.7% year-on-year. At the end of the first quarter of 2022, the total assets reached 1.18 trillion yuan, and the growth rate remained basically stable. Among them, deposits increased by 12.0% and 12.9% respectively year-on-year, faster than the growth rate of assets, indicating the optimization of liability structure and further highlighting the advantages of deposits; Loans increased by 15.6% and 12.1% year-on-year; At the end of the first quarter, the core Tier-1 capital adequacy ratio was 13.16%, significantly higher than the regulatory requirements.
The net interest margin decreased slightly year-on-year, and the deposit cost remained stable. The company disclosed that the average daily net interest margin in 2021 was 1.86%, a year-on-year decrease of 5bps, which was mainly caused by the upward cost of issued debt securities and interbank liabilities. In 2021, the cost of deposits increased by only 1bp year-on-year. In the fierce deposit competition environment, it once again showed the advantage of deposits.
The asset quality is excellent, and the provision coverage rate reaches 430%. The estimated NPL generation rate in 2021 decreased by 27bps to 0.30% year-on-year, with excellent asset quality. The company’s non-performing rate and attention rate continued to decrease, with the non-performing rate at the end of the first quarter being 0.94% and the attention rate being 0.47%. The overdue rate at the end of 2021 was only 1.08%, both at a low level. The improvement of asset quality has significantly reduced the pressure on the provision of the company, which is the primary factor to promote the recovery of net profit growth. At the same time, the provision coverage of the company remains at a high level, reaching 430% at the end of the first quarter of this year.
Investment suggestion: we slightly adjust the profit forecast according to the latest information and push the forecast forward one year. It is estimated that the net profit attributable to the parent company will be 11.1/12.5/13.8 billion yuan from 2022 to 2024, with a year-on-year growth rate of 14.4/12.3/10.9%; Diluted EPS is 1.15/1.29/1.43 yuan; The current share price corresponds to PE of 5.2/4.6/4.3x and Pb of 0.56/0.52/0.47x, maintaining the “overweight” rating.
Risk tip: the weakening macroeconomic situation may have an adverse impact on the quality of bank assets.
