\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 398 Industrial And Commercial Bank Of China Limited(601398) )
Core view
Performance growth remained stable. In the first quarter of 2022, the operating revenue was 249.5 billion yuan, with a year-on-year increase of 6.5%, which was basically the same as that in last year’s annual report; Among them, the net interest income was 177.3 billion yuan, a year-on-year increase of 6.4%; In the first quarter, the net profit attributable to the parent company was 90.6 billion yuan, with a year-on-year increase of 5.7%. The growth rate was lower than that of last year’s annual report, but slightly increased by 0.1 percentage point compared with the two-year average growth rate of last year’s annual report. Annual ROA1 in the first quarter of 202201%, a year-on-year decrease of 0.01 percentage points; The first quarter’s annualized weighted average roe12 2%, down 0.4 percentage points year-on-year.
The asset growth rate is slightly lower than the industry average. At the end of the first quarter of 2022, the total assets increased by 8.5% year-on-year to 37.3 trillion yuan, slightly lower than the overall level of the industry. Among them, deposits increased by 7.8% year-on-year to 28.0 trillion yuan, and loans increased by 10.9% year-on-year to 21.6 trillion yuan. At the end of the first quarter, the core Tier-1 capital adequacy ratio was 13.43%, the Tier-1 capital adequacy ratio was 15.04%, and the capital adequacy ratio was 18.25%, all meeting the regulatory requirements.
Net interest margin bottoms out. The average daily net interest margin of the company in the first quarter was 2.10%, a year-on-year decrease of 4bps, mainly due to the tail raising effect of the decline in net interest margin in the second and third quarters of last year. On a month on month basis, the net interest margin in the first quarter of this year was only 1 bp lower than that in the fourth quarter of last year, basically stabilizing.
The net income from handling charges increased slightly. In the first quarter of 2022, the net fee income increased by 1.2% year-on-year to 41.7 billion yuan, and the growth rate was basically close to that of last year’s annual report. The low growth rate was mainly due to the reduction of relevant fee income due to the company’s adherence to business transformation and the implementation of fee reduction and profit transfer policies.
The cost income ratio remained stable. In the first quarter of 2022, the business and management fee was 43.4 billion yuan, a year-on-year increase of 5.3%, the cost income ratio was 17.4%, a slight decrease of 0.2 percentage points year-on-year, and remained basically stable.
Asset quality remained stable. According to the five level classification of loan quality, the company’s non-performing loan balance at the end of the first quarter of 2022 was 306.9 billion yuan, an increase of 13.5 billion yuan over the end of the previous year, and the non-performing loan ratio was 1.42%, which was the same as that at the end of the previous year. The provision coverage rate at the end of the first quarter was 210%, an increase of 4 percentage points over the beginning of the year.
Investment suggestion: the overall performance of the company in the first quarter has little change compared with the annual report. We maintain the profit forecast unchanged. It is expected that the net profit attributable to the parent company will be 366.9/386.2/406.9 billion yuan from 2022 to 2024, with a year-on-year growth rate of 5.3/5.3/5.3%; Diluted EPS is 0.91/0.97/1.03 yuan; The current share price corresponds to PE of 5.0/4.7/4.5x and Pb of 0.52/0.49/0.45x, maintaining the “buy” rating.
Risk tip: the weakening macroeconomic situation may have an adverse impact on the quality of bank assets.
