Events:
On January 14, China Merchants Bank released the 2021 results KuaiBao. For the whole of 2021, revenue increased by 14.03% over the same period last year; net profit from home increased by 23.20% over the same period last year; and earnings per share were 4.61 yuan (3.79 yuan in 2020). By the end of 2021, the net assets per share were 29.10 yuan (25.36 yuan at the end of 2020).
Comments:
The performance is accelerating and the interest rate spread is not weak. For the whole of 2021, China Merchants Bank's revenue increased by 14.03% compared with the same period last year, an increase of 0.49pct over the previous three quarters. Among them, the annual net interest income increased by 10.21% compared with the previous three quarters, the growth rate increased by 1.47pct compared with the previous three quarters, while the annual total assets growth rate increased by 10.90%, and the growth rate increased by 1.57pct compared with the previous three quarters. Accordingly, assuming that the proportion of interest-bearing assets remains unchanged at the end of the third quarter, the projected annual net interest margin is about 2.47%. Compared with the previous three quarters, the forecast value narrowed slightly 1bp, and the overall performance is not weak. Total non-interest income for the whole year increased by 20.73% over 2020, and great wealth management continued to advance.
Homing net profit is also accelerating, up 23.20% from a year earlier, an increase in 0.99pct over the first three quarters. In terms of profitability, China Merchants Bank's weighted average ROE in 2021 was 16.94%, an increase in 1.21pct compared with 2020, and profitability continued to improve.
The defect rate continues to decline, and the provision is thickened. By the end of 2021, China Merchants Bank had a non-performing loan ratio of 0.91%, continuing to decline in 2bp at the end of the third quarter from a month earlier, and the non-performing rate was the lowest since 2015. The provision coverage rate has increased to 441.34% from the end of 2020, and continues to maintain an absolutely high level among share banks.
Deposits grow rapidly and have great potential for development. By the end of 2021, China Merchants Bank's deposits increased by 12.77% compared with the end of 2020, which is higher than the increase in total assets (10.90%) and loans (10.76%). The debt side will continue to benefit from a large number of low-cost settlement deposits brought about by the big wealth management business. Great potential for development.
Investment advice: in 2021, China Merchants Bank's performance has maintained high growth, asset quality has continued to improve, and a large number of low-cost settlement deposits brought by large wealth management business support China Merchants Bank's strong development potential. It is forecast that 2021, 2022, PB will be valued at 1.65X/1.39X/1.18X in 2023, maintaining a "buy" rating.
Risk hint: asset quality is affected by a higher-than-expected decline in the economy, and credit risk is concentrated exposed.