Guiyang Bank disclosed its annual report for 2020 and quarterly report for the first quarter of 2021, and its Q1 performance was slightly lower than expected, ranking 10th among listed city firms. In the context of the 2020A epidemic, core profitability continued to grow, and revenue, PPOP and net profit from home increased by 9.6%, 13.1% and 2.1%. 2021Q1 revenue, PPOP, home net profit changes-14.7%,-18.6%, + 4.4%, the growth rate is higher than 2020A month-on-month change-24.3pcts,-31.6pcts, 2.3pcts. The lower-than-expected performance of Q1 is mainly due to a large decline in core profitability, and the driving factors are as follows: (1) the growth of average interest-bearing assets of Q1 (+ 2.8%) has slowed significantly, which is 6.7 pcts lower than that of the same period last year (+ 9.5%). It is mainly affected by the contraction of investment assets for two consecutive quarters. (2) the greater drag on other non-interest income is due to the higher base last year, taking into account the sharp rise in financial market interest rates after April last year, after the year-on-year decrease of 7.3% of other non-interest income in 2020, this negative contribution will fade quarter by quarter; (3) the narrowing of net interest margin and the increase in cost-to-income ratio are more affected by the short-term base.
Both ends of the balance sheet affected at the same time, and Q1 spreads weakened. After caliber adjustment, the net interest spreads of 19A, 20Q1, 20A and 21Q1 are 2.40%, 2.39%, 2.52% and 2.23%, respectively. The month-on-month decline in 20Q1 spreads is mainly due to the simultaneous influence of assets and liabilities: (1) the impact of private Prudential plus LPR centralized repricing leads to a decrease of 7bps in average lending interest rates compared with the same period last year; the fluctuation of interest rates in financial markets leads to a decline in bond yields by 14bps year-on-year, and the final return on assets is down 18bps from the same period last year. (2) due to the influence of fixed deposit + term structure, the cost of deposit increased by 12bp compared with the same period last year, which pushed up the cost of interest-bearing liabilities by 8bps.
Asset side: the scale of interest-bearing assets shrank and the proportion of loans increased. Interest-bearing assets at the end of the first quarter shrank by 3.5% compared with the beginning of the year, mainly due to a 10.8% contraction in investment assets compared with the beginning of the year, of which the balance of transactional financial assets shrank by 9.4%. The balance of bond investment shrank for two consecutive quarters (20Q4VRT 5.2% 21Q1VR 1.1%). The pressure drop of investment assets may reflect both the change of Q1 allocation strategy and the non-standard pressure drop. Loans increased 3.3% from the beginning of the year, slowing down from last year's Q1 (3.9%). Loans were mainly corporate loans, personal loan balances were flat month-on-month, and bills fell somewhat. Debt side: deposits at the end of the first quarter increased by 1.5% compared with the beginning of the year, interest-bearing liabilities increased by 1.2% over the beginning of the year, and the proportion of deposits increased by 0.18pcts to 66.9%. Q1 personal deposits grew better. Compared with the beginning of the year, personal deposits increased by 13.3%, public deposits decreased by 4.7%, and other deposits decreased by 0.3%.
The ratio of non-performing loans fell month-on-month. At the end of the first quarter, the non-performing rate was 1.52%, down 1 bps from the previous quarter, the concern loan rate was 2.84%, and 43pbs was down from the previous quarter. 20Q1 estimates that the bad generation rate is 1.42%, which is 0.70pcts lower than that of 20A, and the provision coverage rate (274%) is basically the same as the previous month.
Investment advice: Q1 performance is slightly lower than expected, the follow-up focus on asset quality and negative asset manipulation. It is estimated that the growth rate of the company's net profit for homing in the 22nd year is 8.7%, 12.5%, 2.00, 2.25 and 15.57 yuan per share, respectively, for BVPS. The current share price of A shares corresponds to 3.9XCompare 3.4XMague PB for 0.57X/0.50X in 21 / 22 PE. We give the company a 2021 PB valuation of 0.7X, a reasonable value of 9.49 yuan per share, and maintain a "buy" rating.
Risk tips: the economy has declined more than expected, asset quality has deteriorated significantly, and regional deposit competition has intensified.