Performance preview
The company expects 1H22 homing net profit to decline by about 30-35% year-on-year.
On July 26, China Cinda issued a profit warning. It is estimated that the net profit of 1H22 will drop by about 30% Mel 35% compared with the same period last year. The main reason is that due to the impact of changes in the macroeconomic situation and market environment, the quality of some of the financial assets held by the company measured by amortized cost is under greater pressure, and the company increases credit risk provisions for such assets.
Pay attention to the main points
The market expects Cinda to increase the provision, but the provision is more than expected.
Financial assets measured at amortized cost include non-performing debt assets purchased from financial institutions and non-financial institutions (that is, acquisition and reorganization of non-performing debt assets) and their accrued interest, other debt investments (mainly government bonds, trust products and trust beneficial rights, debt investment) and their accrued interest, the scale of the above assets in 2021 is 148.9 billion yuan and 51 billion yuan respectively. The corresponding impairment reserve balance is 14.5 billion yuan and 1.9 billion yuan respectively, and the impairment reserve balance / corresponding asset size is 10% and 4% respectively.
In 2021, the scale of non-performing debt assets measured at amortized cost decreased by 23% compared with the same period last year, mainly because the company's new investment was more prudent and actively defused stock risk; other debt investment measured by amortized cost increased by 11% year-on-year (parent company grew by 9% year-on-year, subsidiaries grew by 12%).
According to the credit risk indicators, among the non-performing debt assets measured by amortized cost, the second-stage assets accounted for 22%, the third-stage assets accounted for 6%, and the overdue assets accounted for 14%. The gap between the scale of overdue assets and the balance of impairment provision is about 6.1 billion yuan, accounting for 6% of revenue and 47% of net profit in 2021. Among the non-performing debt assets measured by the parent company at amortised cost, the highest proportion in the central region is about 29%, followed by the Bohai Rim region and the western region, accounting for 22% and 21%. The highest proportion of real estate is about 42%, followed by the manufacturing industry accounts for 14%; in terms of shared insurance types, the highest proportion of mortgages is about 67%.
According to the credit risk index, 4.8% of the investment assets measured by amortized cost are impaired assets, and the gap between the scale of impaired assets and the balance of impairment provision is about 600 million yuan, accounting for 0.6% of revenue and 4% of net profit in 2021.
A new round of risk resolution aggregation model upgrade. China Cinda announced that under the influence of the epidemic and other factors, the external environment is more complex and grim, and the company plans to continue to focus on risk resolution, model upgrading, financial technology, and explore the way for high-quality development of asset management companies with Chinese characteristics. We expect the company to focus more on the upgrading of the model in this round of risk resolution, such as participating in key areas such as mergers and acquisitions of problematic real estate enterprises and the reform of small and medium-sized banks.
Profit forecast and valuation
Maintain a neutral rating, with the current share price corresponding to 0.2x/0.2x 2022max 2023E PCMB. Taking into account the impact of the epidemic and other factors, we increased the forecast of asset impairment loss, lowered the company's net profit of 2022max 23e by 23.1% Compact 23.3% to 9.763 billion yuan / 10.281 billion yuan, and lowered the target price of 21.1% to 1.31 HK dollars corresponding to 0.3x/0.3x 2022Universe 2023E Pmax B, which has 14.9% upside space compared with the current stock price.
Risk.
The quality of assets is not as good as expected.