Core ideas:
The performance has increased in an all-round way, and the share of non-interest income has increased. China Merchants Bank released the 2021 results KuaiBao, annual revenue and return net profit increased by 14.03% and 23.20% respectively compared with the same period last year, and the growth rate continued to pick up compared with the previous three quarters. 2021Q4's single-quarter revenue and net profit increased by 15.6% and 26.9% respectively compared with the same period last year, which was also higher than that of 2021Q3 in the single quarter. In terms of revenue structure, in 2021, net interest income and non-interest net income increased by 10.21% and 20.73% respectively compared with the same period last year, and increased 3.31pct and 11.59pct respectively compared with the same period last year. Non-interest income accounted for 38.4%, and 2.13pct increased compared with the same period last year. It is expected that wealth management, asset management and other related fee income are growing rapidly, and the strategy of light banks has achieved remarkable results.
2021Q4 single-quarter expansion is relatively strong, interest rate spreads are expected to rise further. On the asset side, at the end of 2021, total assets increased by 10.9% year-on-year, up 1.57pct from the end of the third quarter; loans increased by 10.76% year-on-year, up 0.87pct from the end of the third quarter; and loans accounted for 60.1% of total assets, down 1.62pct from the end of the third quarter and basically the same as the same period last year. 2021Q4 asset allocation is mainly non-credit, but credit growth is also stronger than in the same period in previous years, with volume premium, asset-end yield is expected to remain stable. On the debt side, at the end of 2021, total liabilities increased by 10.14% year-on-year, up 1.08 pct from the end of the third quarter; deposits increased by 12.77% year-on-year, up 3.36 pct from the end of the third quarter; deposits accounted for 75.5% of total liabilities, up 1.49pct from the end of the third quarter and 1.76pct from the end of the third quarter.
2021Q4 deposit growth is the highest in a single quarter in nearly three years, while the pressure on non-deposit liabilities has fallen, and it is expected that there is room for further decline in the cost rate on the debt side. We use "net interest income / average total assets at the beginning and end of the period" to track the spread, which was 2.31% (annualized) at the end of 2021, up 1bp from the end of the third quarter. According to the data of the third quarterly report of 2021, 2021Q3 spreads have risen 1bp compared with 2021Q2, and 2021Q4 spreads are expected to rise further.
The rate of non-performing quota continues to fall, the provision is thick, and the quality of assets is excellent. At the end of 2021, the non-performing rate continued to drop to 0.91%, a year-on-year decrease of 0.16pct; the provision coverage rate was 441.34%, an increase of 3.66pct compared with the same period last year, and a decrease of 1.80pct compared with the end of the third quarter, mainly due to a rapid decline in the balance of non-performing loans. The current provision is thick, and the non-credit provision has been increased in the first three quarters. On the whole, the quality of various assets remains stable and excellent, and the risk offset capacity is strong.
Profit forecast and investment advice: overall high growth in performance, rebound in interest rate spreads, improvement in non-interest share, and excellent asset quality. ROAE rebounded to 16.94% at the end of 2021, reflecting once again operational soundness and high-quality development sustainability. It is estimated that the growth rate of homed net profit in 21Universe 22 will be 23.2%, 20.5%, 4.61 and 33.03 yuan per share, respectively. The latest closing price of A shares corresponds to the 10.4X/8.5X of 22nd year PE and the 1.7X/1.5X of 22nd year PB of 21Univer. Keep the fair value of A shares unchanged at RMB57.83 per share, and the corresponding PB for 22nd year is 2.0X/1.9X. According to the current AH premium ratio, the fair value of H shares is HK $74.55per share (the exchange rate between the Hong Kong dollar and RMB is 0.8160), all of them are given a "buy" rating.
Risk hint: the economy has declined more than expected, and asset quality has deteriorated significantly.