The year-on-year growth rate of performance declined, and non-interest income was slightly weak
The company disclosed its 2022 quarterly report. Revenue and net profit to the mother increased 8.54% and 12.52% year-on-year, and the year-on-year growth rate declined 5.49 pct and 10.68 pct from the full year of 2021. Among them, net interest income increased 9.97% year on year, and the overall growth rate remained stable; non-interest income increased 6.53% year on year, down 14.23 pct from the full year of 2021, and net income from fees and commissions fell 13.33 pct year on year.
Net interest spreads increased month-on-month, and the increase in deposits was stronger than credit investment
The 22Q1 company's net interest spread was 2.51%, up 3 bps from 21Q4, mainly due to debt-side cost optimization.
On the asset side, the macroeconomic slump has led to insufficient demand for effective credit. The parent company invested 70% of its Q1 loans in the same period last year. Among retail loans, the personal housing mortgage market continues to be sluggish, and demand for small and micro credit has declined. The number of new loans added in Q1 was 33% and 50% in the same period last year. Furthermore, credit card loan balances declined slightly. Public loans have benefited from abundant project reserves, and overall credit investment is relatively good. On the debt side, the amount of new customer deposits added in 22Q1 was 167% of the same period last year. Judging from the average balance, 22Q1 customer deposits accounted for 81% of interest-bearing debt, a further increase of 2.42pct from 21Q4.
Market downturn drags down AUM growth, and long-tail customer base growth remains strong
The sluggish performance of the capital market has put pressure on the company's wealth management business, causing a certain drag on overall AUM growth. The year-on-year growth rate of corporate retail AUM reached 18.18% at the end of 22Q1, and the year-on-year growth rate fell 2.14pct from the end of 21Q4. Among them, the year-on-year growth rates of private AUM and non-private Golden Sunflower customer AUM declined by 5 pct and 1.52 pct respectively. It is worth noting that the year-on-year growth rate of AUM customers below Golden Sunflower continued to rise, reaching 21.50% by the end of 22Q1, and the base customer base continued to consolidate.
Credit risk has picked up slightly, and asset quality has remained stable
The company's non-performing rate reached 0.94% at the end of 22Q1, up 3 bps from the end of 21Q4, and the bad generation rate increased by 0.21 pct compared to 2021; in addition, the proportion of concerned loans and overdue rates increased by 12 bps and 7 bps respectively. There was a slight deterioration in the company's asset quality-related indicators, mainly due to rising risks for real estate customers and the impact of the local epidemic on retail loans, but key indicators remained low. At the same time, the company increased its bad accounting efforts. Credit impairment losses for 22Q1 loans increased 82% year on year. Although affected by the increase in bad generation, the company's provision coverage rate fell 21.19pct from the end of 21Q4, but the overall level remained high.
Looking at the real estate segment, the credit risk of some enterprises continued to be exposed. At the end of 21Q4, the parent company's non-performing rate of public real estate increased 1.18 pct month-on-month, the Group's real estate-related business balance that assumed credit risk increased 1.17% month-on-month, and the business balance that did not bear credit risk fell 8.18% month-on-month. The risk balance of the overall real estate business fell 3% month-on-month, and exposure continued to shrink.
Investment advice: Although there have been brief adjustments, long-term development resilience is still sufficient for the future. As the impact of the epidemic weakens and the steady growth policy continues to gain strength, corporate credit investment is expected to usher in restorative growth, and asset quality will stabilize. At the same time, as the value cycle chain of big wealth management continues to be refined, growth in the middle income is expected to resume. Net profit attributable to the mother in 2022-2024 is expected to increase 15.55%, 15.83%, and 15.91% year-on-year. As of April 22, the company's PB (LF) was 1.46 times, maintaining the 2022 PB target of 1.95 times. The corresponding target price was 63.63 yuan, maintaining the “buy” rating.
Risk warning: Macroeconomics are weak, credit demand is insufficient, and credit risk fluctuates.