Core ideas:
Zijin Bank disclosed that the annual report of 2021 and the quarterly report of 2022 showed that annual revenue, PPOP and net profit increased by 0.6%,-8.8% and 5.1% year-on-year in 2021, with an improvement in growth compared with the previous three quarters. Provision, scale growth and interest margin were positive contributors to the performance. 22Q1 revenue, PPOP and home net profit increased by 3.4%, 4.3% and 10.5% compared with the same period last year, and the growth rate rebounded further. Provisions, interest spreads and non-interest income were the positive contributors to the performance. The company disclosed that the credit cost in 2021 was 0.59%, a decrease of 0.49pct compared with the same period last year. It is estimated that the credit cost of 22Q1 has dropped by 0.28pct compared with the same period last year. The substantial improvement in asset quality has led to a high and downward credit cost, and the slowdown in provision has made a positive contribution to profit growth.
The structure of assets and liabilities has been optimized, deposits and loans have increased rapidly, and interest spreads have continued to rise. In 2021, the net interest margin was 1.83%, an increase of 4bpMagne22Q1 over the previous three quarters and continued to rise to 1.84%. On the asset side, the scale of investment assets and interbank assets increased negatively compared with the same period last year, dragging down the growth of interest-bearing assets, but loans remained high, growing by 16.0% year-on-year in 2021, accounting for 67.8% of interest-bearing assets. In the loan structure, the proportion of personal loans increased to 28.3%, supporting the rate of return on assets, and the rate of return on interest-bearing assets in 2021 was 3.94%, an increase in 5bp compared with the same period last year. 22Q1 credit got off to a good start, with loans up 6.9% from the beginning of the year, an increase higher than the same period last year. On the debt side, focusing on core deposits, the proportion of deposits in interest-bearing liabilities increased to 83.8% at the end of 2021 and further to 84.1% at the end of 2021, with the main contribution coming from personal deposits. The cost rate of interest-bearing liabilities in 2021 was 2.29%, an increase in 16bp compared with the same period last year. 22Q1 deposits rose 11.8% from the beginning of the year, an increase higher than the same period last year. The proportion of corporate deposits and personal deposits is relatively high, the debt cost is at a better level in the industry, a small decline and large retail transformation will help to boost asset returns, and the subsequent interest rate spreads are expected to continue to rise.
The bad new generation rate dropped to a low level, the bad identification became stricter, the pan-defect rate continued to drop, and the final defect rate of 22Q1 dropped to 1.45%, creating the best level since listing. At the end of 2021, the undesirable + attention rate was 2.08%, which was 72bpMagne22Q1 down from the same period last year to 2.07%. Although the 22Q1 attention rate increased slightly, it was still at a low level. In 2021, the ratio of the balance of loans overdue for more than 90 days to non-performing loans dropped to 48.5%. All loans overdue for more than 60 days were counted as bad, and the identification of non-performing loans became stricter. It is estimated that the rate of bad new generation in 2021 dropped from 0.57% to 0.25%, and the pressure of bad generation was greatly released. At the end of 22Q1, the provision coverage rate reached 241.31%, the provision buffer pad was thickened, and the risk offset ability was enhanced.
Profit forecast and investment advice: it is estimated that the net profit growth rate of 22max in 23 years will be 4.7%, 6.7%, 0.43, 0.46, 4.55 and 4.91 yuan per share, respectively. The current stock price corresponds to 22 / 23 PE as 6.69X/6.27X, and 22max 23 PB as 0.64X/0.59X. The company is rooted in Nanjing, with obvious geographical advantages and deposit advantages, retail transformation, accelerated development of wealth management, with reference to the industry valuation and the company's historical valuation center, giving the company a 22-year PB valuation of 0.9X, a reasonable value of 4.10 yuan per share, and maintaining an "overweight" rating.
Risk hints: (1) the economy has declined more than expected, (2) asset quality has deteriorated significantly, and (3) regional deposit competition has intensified.