The growth of performance is steady, and the growth of financial revenue is relatively fast. Bank of Shanghai released quarterly results for 22 years: revenue, PPOP and homecoming net profit increased by 2.9%, 2.1% and 5.4% compared with 21A, respectively-7.9pcts,-4.9pcts,-0.2pcts The rebound in Q1's net profit of 22Q1 (2.2% vs.21Q4:-7.5%) in a single quarter is mainly due to a narrowing of the decline in other non-interest income and a reduction in the drag on provisions, while the slowdown in the growth of fee income and narrowing of interest spreads is a drag. It should be noted that: (1) demand for credit is weaker than the same period last year, Q1 interest-bearing assets increased by 3.9% (vs.21Q1:4.0%) over the beginning of the year, and loans increased by 2.7% (vs.21Q1: 4.5%) over the beginning of the year. (2) the growth of public loans was better than that of retail, and the balance of public loans increased by 3.4% compared with the beginning of the year (vs. 21Q1 (11.8%), while the demand for retail loans decreased by 2.3% (vs. 21Q1). 0.7%). (3) AUM increased by 2.15% to 920.9 billion yuan over the end of last year; (3) income from financial asset management fees was 457 million yuan, an increase of 20.70% over the same period last year.
Spreads fell steadily and slightly. The company's Q1 net interest margin is 1.71%, which shrinks 3BP compared to 21A. While the asset-end return is lower, the debt-side cost ratio is also down to a considerable extent. It is estimated that the rate of return on assets is 3.56% lower than that of the previous month. Structurally, the proportion of loans and investment assets with higher returns has decreased slightly, of which the proportion of loans has dropped by 0.54pcts to 46.1%, and that of investment assets by 0.14pcts to 39.4%. It is estimated that the interest payment rate of debt has been reduced by 7BP to 2.21% compared with 21A; structurally, the growth of deposits has slowed down (22Q1VO4.7 vs. 21Q1GRV 5.4%), and its share has dropped to 60.5%. Personal deposits have grown better than their counterparts, up 6.7% from the beginning of the year (vs. Corporate deposits: 4.2%); the proportion of market-oriented interbank debt decreased, the proportion of interbank debt decreased by 1.41pcts (to 25.1%), the proportion of bonds issued remained stable, and the proportion of borrowing from the central bank increased.
The quality of assets continued to be consolidated, and the new generation of bad products decreased compared with the same period last year and month-on-month. At the end of March, the company's non-performing loan ratio was 1.25%, unchanged from the previous month; provision coverage was 304%, rising 2.5pcts from the previous month. Q1 estimates that the net bad generation rate is 1.35%, which decreases 6BP and 37BP respectively compared with the same period last year and month-on-month. Forward-looking indicators, focusing on the loan ratio accounted for 1.60%, a month-on-month decline in 5BP. At the end of March, the core tier one capital adequacy ratio was 9.14%, which was the same as the same period last year and was at a higher level.
Profit forecast and investment advice: the company's retail transformation continues to deepen, while the retail AUM growth trend is improving, profitability improvement is expected. During the reporting period, profits remained stable and asset quality was further consolidated. It is estimated that the growth rate of homing net profit of the company in 22x23 is 6.6%, 7.8%, 1.58max, 1.71 per share, respectively, and the current A share price corresponds to 22pare, PE is 4.1x, 3.8x, respectively, PB is 0.46X/0.42X. Considering the valuation center and fundamentals of PB in the past two years, we value the 22-year PB of the company at 0.6x, corresponding to a reasonable value of 8.55RMB per share. Maintain a "buy" rating.
Risk hints: (1) more-than-expected decline in economic growth; (2) significant deterioration in asset quality.