\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 328 Bank Of Communications Co.Ltd(601328) )
Core view
The performance grew steadily. In the first quarter of 2022, the operating revenue reached 73.6 billion yuan, a year-on-year increase of 7.7%, and the growth rate decreased slightly by 1.7 percentage points compared with last year’s annual report; Among them, the net interest income was 42.5 billion yuan, a year-on-year increase of 10.3%; In the first quarter, the net profit attributable to the parent company was 23.3 billion yuan, with a year-on-year increase of 6.3%. The growth rate was lower than that of last year’s annual report, and slightly decreased by 0.2 percentage points compared with the two-year average growth rate of last year’s annual report. On the whole, the performance growth remained stable. The annualized roa0 in the first quarter of 202278%, with an annualized weighted average roe11.5% in the first quarter 7%, down 0.04 percentage points and 0.12 percentage points respectively compared with the same period last year.
The asset growth rate is relatively leading among large banks. At the end of the first quarter of 2022, the total assets increased by 10.3% year-on-year to 12.3 trillion yuan, slightly faster than the average growth rate of the industry and at a high level among major banks. Among them, deposits increased by 8.3% year-on-year to 7.5 trillion yuan, and loans increased by 12.4% year-on-year to 6.9 trillion yuan. At the end of the first quarter, the core Tier-1 capital adequacy ratio was 10.29%, the Tier-1 capital adequacy ratio was 12.54%, and the capital adequacy ratio was 15.24%, all meeting the regulatory requirements.
The net interest margin remained stable. The average daily net interest margin of the company in the first quarter was 1.56%, a slight increase of 2bps year-on-year and a decrease of 3bps compared with the fourth quarter of last year, mainly due to the fluctuation of net interest margin between different quarters. Overall, the company’s net interest margin has remained basically stable since last year.
The net income from handling charges increased well. The net fee income in the first quarter of 2022 was 13.6 billion yuan, an increase of 8.8 percentage points over the same period last year, mainly due to the increase in the income of agency business, custody and other entrusted business. The cost income ratio was the same as that of the same period last year. In the first quarter of 2022, the business and management fee was 19.1 billion yuan, with a year-on-year increase of 7.7%, and the cost income ratio was 26.0%, which was the same as that of the same period last year.
The non-performing loan ratio decreased and the provision coverage rate 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 101.8 billion yuan, an increase of 5 billion yuan over the end of the previous year, and the non-performing loan ratio was 1.47%, a decrease of 0.01 percentage point over the end of the previous year. The provision coverage rate at the end of the first quarter was 167%, unchanged from 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 93.5/995105.2 billion yuan from 2022 to 2024, with a year-on-year growth rate of 6.8/6.4/5.7%; Diluted EPS is 1.18/1.26/1.34 yuan; The current share price corresponds to PE of 4.3/4.0/3.8x and Pb of 0.44/0.41/0.38x, maintaining the “overweight” rating.
Risk tip: the weakening macroeconomic situation may have an adverse impact on the quality of bank assets.
