Revenue and performance growth hit new highs
Recently, the company released its 2021 results KuaiBao: year-on-year net profit + 23.20% (year-on-year + 22.21% in the first three quarters) and operating income + 14.03% (+ 13.54% in the first three quarters). Annual weighted ROE 16.94% (18.11% in the first three quarters), year-on-year + 1.21pct.
The fundamentals of the company are steady and steady, continuing the consistent excellent performance. Revenue and performance both showed double-digit growth, the highest growth rates in nearly six years and eight years, respectively, and ranked first and third among the stock banks that have disclosed data. The accelerated release of the company's performance is mainly due to the accelerated expansion of net interest income, of which the net interest margin contributed the main force.
Q4 net interest margin is improved, and asset-negative structure is optimized in both directions.
According to estimates, the company Q4 single-quarter net interest margin + 4bp, has risen for two consecutive quarters. In the case of overall downward interest rates in the Q4 market, we judge that the company mainly depends on structural optimization to improve the spread.
On the asset side, the company may continue the trend of Q3 and continue to increase loans with relatively high yields.
On the debt side, the company has increased the absorption of low-cost deposits. This can be seen from the year-on-year growth rate of total deposits and the proportion of total liabilities at the end of Q4 compared with + 3.36pct and + 1.49pct at the end of Q3, respectively. In the market environment where there is widespread pressure to attract deposits, the growth rate of corporate deposits has risen rather than declined, and maintained a high level of 12.8%, reflecting the company's excellent customer base and strong ability to attract deposits.
Non-interest continues bright performance, the development of wealth management can be expected.
The company's full-year non-interest income increased by 20.73% compared with the same period last year, which was only slightly lower than in the first three quarters by 83bp and remained at a high level. The company has basically formed a big wealth management business model of expanding "big customer group", building "big platform" and "big ecology", and various business revenues are expected to blossom in the future.
The defect rate hit a new low, and the provision coverage rate remained high.
At the end of Q4, the company's defect rate was-2bp to 0.91%, which has fallen for six consecutive quarters and is at the lowest level of listed banks. The provision coverage rate is 441.34%, month-on-month ratio is-1.8pct, and loan-to-loan ratio is 4.03%, month-on-month ratio-0.1pct, all of which are at the leading level of listed large and medium-sized banks.
Looking to the future, we believe that the risk of China Merchants Bank's real estate industry can be controlled, and the asset quality will remain resilient: first, the main line of steady policy growth and risk prevention is very clear, with the relaxation of the financial policy of the real estate industry, under the guidance of policy bottom line thinking, the risk of housing-related loans can be controlled as a whole. Second, the company's customer structure is good. By the end of Q3 last year, the balance of customers with high credit rating accounted for 86.74%, and the balance of strategic real estate customers of the head office accounted for 64.78%.
Investment advice: optimistic about the company's big wealth management strategy, maintaining the "buy" rating China Merchants Bank is the benchmark for retail transformation, wealth management is forceful, asset quality is good, and capital ammunition is abundant. Under the favorable credit environment this year, it is expected to be the first to enjoy the policy dividend of credit repair and give full play to the flywheel effect of the big wealth management value cycle chain. We are optimistic about the business growth space of the company under the retail 3.0 model, and the company's performance growth is expected to be 15.27% and 16.05% respectively from 2022 to 2023. The company's current share price corresponds to 1.47 times PB in 2022, we give it 1.95 times the target PB valuation, corresponding to the target price of 63.72 yuan per share, maintaining the "buy" rating.
Risk hint: the economic downturn exceeded expectations; KuaiBao is the group data of preliminary accounting, subject to the annual report.