Guiyang Bank ploughed the market in Guizhou Province, the scale of assets expanded steadily, the operating indicators remained stable, and the performance continued to recover.
Revenue growth slowed and performance continued to grow. The company's homing net profit in the first quarter of 2021 was + 4.39% compared with the same period last year (+ 2.10% in 2020). (1) revenue side: 21Q1's operating income is-14.7% compared with the same period last year, and net interest income / fee net income is-1.17% and 9.14% respectively compared with the same period last year. (2) Expenditure side: the cost-income ratio of 21Q1 increased by 3.66pct to 23.82% compared with the same period last year, and operating costs increased slightly. (3) provision side: the provision of 21Q1 has slowed down, and the profit before provision / provision has decreased by 15.61pct to 32.12% compared with the same period last year, and the growth rate of net profit has rebounded.
Asset expansion was steady and spreads narrowed slightly. (1) assets maintain steady growth: 21Q1's total assets are + 1.30% month-on-month, of which loans are + 3.28%, which is more positive for public investment, and corporate loans are + 4.09%.
(2) the interest margin has declined from the same period last year: 21Q1's net interest margin is 2.23%, which is 16bp lower than the same period last year. Interest income / interest expense in the first quarter is + 3.64% and 7.99% respectively compared with the same period last year. It is speculated that the narrowing of interest margin is mainly affected by the upward debt cost.
The net income of handling fees decreased slightly, and the investment business was a drag on the income. 21Q1's non-interest income was-60.86% year-on-year, accounting for 10.40% of revenue. (1) the decline in intermediary business income: 21Q1 realized a net income of 242 million yuan in fees and commissions,-9.14% compared with the same period last year. (2) the decline of investment business income: 21Q1's investment income, fair value change profit and loss and exchange gains add up to 118 million yuan (20Q1 is 665 million yuan). The high base of investment business leads to a low growth rate of non-interest income.
Bad books decline, and provision coverage is adequate. (1) the non-performing loan ratio decreased: at the end of the first quarter, the non-performing loan ratio of the company was 1.52%, which was 0.01pct lower than that at the end of 2020, while the non-performing loan ratio was 2.84%, which was higher than that at the end of 2020 (0.43pct). (2) risk offset capacity is adequate: at the end of the first quarter, the company's provision coverage rate was 273.83%, the loan ratio was 4.16%, and the provision coverage remained adequate.
Risk factors: macroeconomic growth declined faster than expected, leading to a significant deterioration in asset quality.
Investment suggestion: Guiyang Bank ploughs the market in Guizhou Province, the scale of assets expands steadily, the operating index remains stable, and the performance continues to recover. Considering that the company's interest margin is still under narrow pressure, we slightly reduce the company's 2021 EPS forecast to 1.60 yuan / 1.66 yuan (the original forecast is 1.67 yuan / 1.81 yuan), and the current A-share price corresponds to the 2021 0.65xPB. Give the company 0.72xPB in 2021, corresponding to the target price of 8.50 yuan, to maintain the "overweight" rating.