Key elements of the report:
On April 23, 2022, China Merchants Bank released the first quarter results report of 2022.
Main points of investment:
Steady growth in revenue and profits, and re-optimization of cost income: in the first quarter of 2022, operating income was 91.99 billion yuan and net profit was 36.022 billion yuan, an increase of 8.54% and 12.52% respectively over the same period last year. The defect rate was 0.94%, up 0.03 percentage points from the previous month. The ratio of cost to income is 26.10%.
Assets grew steadily, and the net interest margin narrowed slightly: 2.51% in the first quarter of 2022, down 1 basis point from a year earlier. Mainly due to the cumulative impact of the downward market interest rates, the rate of return on interest-bearing assets has declined. At the same time, the Group continued to increase the proportion of customer deposits to interest-bearing liabilities, which to some extent made up for the impact of the decline in the rate of return on interest-bearing assets. It is expected that the net interest margin will remain under pressure in 2022, further increasing the adjustment of the asset-liability structure and stabilizing the interest margin. In addition, loans increased by 3.38% over the beginning of the year, and deposits increased by 5.25% over the beginning of the year.
Net fee income weakened: in the first quarter of 2022, net fee income increased by 5.49%, of which wealth management revenue decreased by 11.11%, asset management revenue increased by 47.55%, and escrow revenue increased by 11.32%.
Bad slightly fluctuated: in the first quarter of 2022, the defect rate rebounded slightly, and the Group cautiously increased its credit loss provision for real estate risk customers. The provision coverage rate was 463%, a decrease of nearly 21 percentage points from the previous month.
Profit forecast and investment advice: in the first quarter of 2022, the performance growth is basically in line with expectations. The rapid growth of big wealth management business in 2021 has formed a certain high base. In the future, China Merchants Bank will further improve the advantages of investment and research and asset allocation on the basis of giving full play to the advantages of channels, so as to promote the rapid growth of large wealth management business. It is predicted that the EPS in 2022 will be 5.30 yuan / 6.01 yuan, according to the closing price of China Merchants Bank A shares on April 22, corresponding to 1.32 times PB in 2022, maintaining the overweight rating.
Risk factors: affected by the COVID-19 epidemic, the global economic recovery is not as expected, resulting in significant fluctuations in bank assets.