Non-interest performance is beautiful, revenue tamps the foundation of performance.
The company disclosed its 2022 semi-annual report, and its financial performance was basically consistent with the disclosure of its performance by KuaiBao. In the first half of the year, revenue and net profit increased by 18.17% and 15.11% respectively compared with the same period last year. In terms of revenue, non-interest income stood out. 22H1 increased by 90.76% compared with the same period last year, mainly due to a sharp increase of 136.15% in investment income over the same period last year. Net income from fees and commissions increased by 28.07% over the same period last year. In terms of performance attribution, the company's performance remained at a high level, benefiting from the expansion of interest-bearing assets and other non-interest income growth. At the end of 22Q2, the weighted ROE of the company reached 11.16%, which is 0.32pct higher than that of 22Q1, and the profitability continues to improve.
Credit continues to expand and structural optimization continues to advance.
In terms of pricing, 22H1 net interest margin was 1.49%, down 13bp from 2021, mainly due to asset-side pricing decline. 22H1 loan yields fell 23bp compared with 2021, driving the return on interest-bearing assets down 16bp, while the interest-bearing debt cost ratio fell 6bp, supporting the net interest margin.
On the asset side, the scale of the company's interest-bearing assets expanded rapidly in the first half of the year, driving net interest income to grow by 7.7% compared with the same period last year. Total loans at the end of 22Q2 rose 14.45 per cent year-on-year, higher than the overall growth rate of assets, accounting for 53.81 per cent of interest-bearing assets. In terms of loan structure, loans to public loans increased by 16.62% year-on-year, accounting for 53.49% of total loans by 0.95pct compared with the beginning of the year. In the first half of the year, the company increased its support to small and micro enterprises, and the balance of inclusive small and micro loans increased by 8.77% over the beginning of the year, higher than the growth rate of various loans. On the retail side, personal loans increased by 17.25% compared with the same period last year, of which personal consumption loans and personal business loans accounted for 55.85% of the total 3.66pct at the beginning of the year, and the retail loan business structure continued to optimize.
On the debt side, the total amount of 22H1 deposits increased by 21.9% compared with the same period last year, and the proportion of interest-bearing liabilities increased to 66.5% from the previous month. Continuous structural optimization will effectively reduce the cost of the debt side.
The identification of defects continues to be strict, and the quality of assets remains excellent.
The final defect rate of 22Q2 is 0.9%, which is the same as the previous month, ranking first among listed banks. Affected by the disturbance of the epidemic in Fujian in the first half of the year, the final attention rate of 22Q2 slightly increased to 0.87% from the previous month. The overdue rate rose 26bp to 1.17% from the beginning of the year, mainly due to an increase in overdue loans from some real estate enterprises. The bad identification of the company continues to be strict, and the loans overdue for more than 60 days are classified as non-performing loans, and the asset quality is stable under strict non-performing identification. The 22Q2 final provision coverage rate is 364.18%, a month-on-month decrease of 7.45pct, and a strong risk offset capability.
Investment suggestion: regional head city firm, start new growth slightly
As a city firm in Fujian Province, the company has always practiced the regional strategy of "continuous deep ploughing and key breakthrough" and has a stable market space in the local market. At the same time, the company continues to consolidate the small and micro customer base of small and medium-sized enterprises, retail and inclusive, innovate inclusive financial products, strengthen "specialized and innovative" financial support, and the proportion of inclusive small and micro loans continues to increase. We are optimistic about the growth of the company's performance, and will adjust the previous forecast of the company's performance growth. It is estimated that the homing net profit from 2022 to 2024 will increase by 16.02% (15.22%), 16.70% (15.54%) and 15.26% respectively. At present, the corresponding company PB (MRQ) has fallen to 0.72 times, an absolute low in history, which is also lower than the average level of listed banks. We are optimistic that the growth of corporate performance will lead to a rebound in ROE and upgrade its rating to "overweight" rating.
Risk tips: weak macro-economy, insufficient credit demand, credit risk fluctuations