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华夏银行(600015)2022年年报及2023年一季报点评:步履夯实 着力稳健

Huaxia Bank (600015) 2022 Annual Report and 2023 Quarterly Report Reviews: Steady Steady Steps

中信證券 ·  Apr 28, 2023 00:00  · Researches

Huaxia Bank continues to operate steadily, its performance is progressing steadily, its expansion has been steady and consolidated, and the quality of its assets is steadily improving. With the accelerated implementation of strategic transformation, development is expected to improve quality and efficiency.

Matters: Huaxia Bank released its 2022 annual report and 2023 quarterly report. The revenue for 2022 and 2023Q1 was -2.15%/-3.68%, respectively, and the net profit attributable to the mother was +6.37%/+4.05% year-on-year; the 2023Q1 non-performing loan ratio fell 0.02pct to 1.73% from the beginning of the year.

Revenue declined slightly, and cost provisions were saved. Net profit for the first quarter of 2023 was +4.05% year-on-year (+6.37% compared to 2022). 1) On the revenue side, net interest is under pressure, non-interest support: Net interest income for the full year of 2022 and 2023Q1 was -6.7%/-6.3% year on year, with marginal pressure on interest spreads being a drag; non-interest income was +20.0%/+5.9% year on year, and income related to investment business continued to grow. 2) On the expenditure side, cost control is steady: the 2023Q1 cost revenue ratio decreased by 0.12 pcts to 28.30% year-on-year (28.42% for the full year of 2022), and cost control was further optimized. 3) On the reserve side, continue to feed back profits: 2023Q1 asset impairment losses were -9.72% year-on-year (-13.02% compared to the same period in 2022), and credit cost savings helped profit growth.

Interest business: Interest spreads are under marginal pressure, and prices will be actively expanded by volume after a year. Net interest income for the full year of 2022 and 2023Q1 was -6.67%/-6.33%, 1) Interest spreads are under pressure: the company's net interest spread in 2022 was 2.10%, which declined quarterly in the four quarters of the year. The 2023Q1 net interest spread continued to fall 15 bps to 1.95% from the beginning of the year, mainly due to a decline in asset-side earnings. 2) The expansion was low and positive: total assets in 2022 and 2023Q1 were +1.51%/+3.31% month-on-month respectively, of which loans were -0.53%/+3.52% month-on-month; total debt was +1.25%/+4.02% month-on-month, of which deposits were -0.34%/+5.68% month-on-month. 3) Asset load structure optimization after the year: The share of 203Q1 loans in total assets and deposits in total liabilities increased by 0.12 pcts/0.08 pcts to 58.40%/59.50% respectively. Optimizing the capital burden structure will help the marginal trend of interest spreads to improve.

Non-interest business: Investment income increased, and the middle income recovered from a low level. 1) Investment business revenue remained high: The company's “investment income+fair value change gain+exchange gain and loss” for the full year of 2022 and 2023Q1 were +25.71%/+44.03%, respectively. The increase was impressive, mainly due to the sharp increase in investment in financial institutions' asset management plans in 2022, and transactional financial assets increased 53.17% year on year, which also brought high investment returns. 2) Low fee revenue recovery: Net fee and commission revenue for the full year of 2022 and 2023Q1 were +12.1%/-30.8%, respectively. Judging from the 2022 data, it was mainly due to the increase in credit commitment business fees. In 2022, fee revenue increased 1,117 million yuan year-on-year. Credit promises alone contributed 536 million yuan. 2023Q1 declined year-on-year but +7.16% month-on-month. As the financial market recovers, middle income is expected to grow further.

Risk status: asset quality has been steadily improved, and risk compensation capacity has improved. 1) Steady improvement in book quality: The company's non-performing loan ratios for the full year of 2022 and 2023Q1 were 1.75%/1.73% respectively, down 0.03pct/0.02pct from the previous month, respectively, and the book quality index continued to improve. 2) Potential risk pressure drop, risk confirmation prudence:

2023Q1 focuses on the loan ratio of 2.77%, focusing on a decrease of 0.01pct/2.94pcts in loan share and size from the beginning of the year, respectively; loans overdue for 90 days or more accounted for 79.10% of non-performing loans in 2022, which is the first time since 2020 that it is below 80%. Risk identification is more careful and strict, and asset quality is expected to improve. 3) Risk compensation capacity continues to improve: The company's provision coverage rates for the full year of 2022 and 2023Q1 were 159.88%/162.21% respectively, up 8.89 pcts/2.33 pcts respectively over the previous year. While saving credit costs and feeding back profits, the company's risk compensation capacity continued to be consolidated.

Risk factors: The macroeconomic growth rate declined more than expected, and asset quality deteriorated sharply; the level of net interest spreads fell short of expectations; the implementation of the real estate stabilization policy fell short of expectations; and the adjustment of industry regulation policies exceeded expectations.

Investment advice: Huaxia Bank adheres to steady operation, steady progress in performance, steady expansion, and steady improvement in asset quality. With the accelerated implementation of strategic transformation, development is expected to improve quality and efficiency. We slightly adjusted the company's 2023/24 EPS forecast to 1.53/1.66 yuan (the original forecast was 1.45/1.55 yuan), and added the company's 2025 EPS forecast of 1.77 yuan. The current A-share price corresponds to 0.31x PB in 2023. According to the three-stage dividend discount model (DDM) calculation, the company was given a target valuation of 0.33xPb for 2023, maintaining the target price of 6.26 yuan, maintaining the “increase in holdings” rating.

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