Huaxia Bank Disclosure of 2020 Annual report
During the reporting period, the company achieved a net profit of 21.3 billion yuan, down 2.9% from the same period last year, which was 4.5 percentage points lower than that reported in the three quarters.
The growth rate of revenue decreased slightly, and the provision was a drag on the performance.
The company's total assets in 2020 increased by 12.5% to 3.4 trillion yuan compared with the same period last year, an increase of 2.2 percentage points over the third quarterly report, and the core tier one capital adequacy ratio at the end of the period was 8.79%.
In 2020, net operating income reached 95.3 billion yuan, an increase of 12.5 percent over the same period last year, which was 1.7 percentage points lower than that of the third quarterly report. Profit before provisions for the whole year increased 16.3 percent over the same period last year, which was 4.4 percentage points lower than that of the third quarterly report. This is mainly due to the weakening of the contribution of net interest margin in the fourth quarter. The company's annual asset impairment loss increased by 32.3% compared with the same period last year, dragging down the performance.
Benefiting from the downward interest rate in the interbank market, the net interest margin increased year on year.
The company's average daily net interest margin in 2020 is 2.59%, which is higher than that in 2019 by the same caliber. Affected by the decline in LPR, loan yields decreased 7bps compared with the same period last year, while deposit costs increased 3bps, while the increase in net interest margin was mainly due to the improvement of debt costs caused by lower interbank financing costs.
The margin of asset quality has improved, but the bad rate of large companies is still 1.80% at the end of 2020, which is 3bp lower than at the beginning of the year; the attention rate is 3.43%, down 13bp from the beginning of the year; the end-of-period non-performing / overdue loans are 122%, an increase of 6 percentage points compared with the beginning of the year; and the annual non-performing rate is 1.75%, which is lower than the same period last year. 64bps. The company's asset quality has improved, but the asset quality pressure is still great. The provision coverage rate at the end of the period increased by 5 percentage points to 147% compared with the beginning of the year, and the provision coverage rate is still at a low level.
Investment suggestion
The company's performance is in line with expectations, and we postpone the profit forecast by one year. We expect the net profit in 2021 to 2023 to be 23.6 billion yuan / 26 billion yuan / 28.6 billion yuan, a year-on-year increase of 9.5% and 10.2%, corresponding to diluted EPS1.89 yuan / 2.05 yuan / 2.22 yuan. The dynamic PE corresponding to the current stock price is 3.3x/3.1x/2.8x, and the dynamic PB is 0.4x/0.4x / 0.3x, maintaining the "overweight" rating.
Risk hint
The continued weakening of the macroeconomic situation may have a negative impact on the quality of bank assets.