招商银行(600036):信贷投放提速 资产质量优化

China Merchants Bank (600036): Accelerating Credit Investment and Optimizing Asset Quality

華泰證券 ·  04/26  · Researches

Accelerate credit investment and optimize asset quality

Net profit, revenue, and PPOP returned to the mother in January-January +7.8%, -1.5%, -3.9% year on year (+15.1%, +4.1%, +3.9% compared to the full year of 2022). Highlights include accelerated asset and credit expansion, an increase in investment returns, and an improvement in asset quality. Given that midterm revenue still needs to be repaired, we forecast an EPS of 5.90/6.66/7.55 yuan for 23-25, a BVPS forecast value of 37.08 yuan for 23, and A/H shares corresponding to PB0.91/0.94 times. The average PB (MRQ) of the company's A/H shares (MRQ) in the past 5 years (up to 4.26) was 1.58/1.55 times. The company's retail wealth strategy had a moat effect, but considering interest spread pressure, we gave A/H shares a 23-year target of PB1.30/1.25 times, and the target price of A/H shares was 48.20 yuan/52.50 HKD, maintaining the A/H share buy/increase rating.

China's revenue is under pressure, and investment returns are increasing

The year-on-year revenue in January-January was -12.6%, compared to -12.4 pct in '22. Affected by the low investment sentiment of customers, wealth management revenue was -13.3% year-on-year. Among them, agency trust plan income and agency wealth management income were -29.8% and -23.5% year-on-year. The decline was significant, but asset management fees and commission income bucked the trend and increased +2.65% year-on-year. Q1 Big Wealth's revenue accounted for +1.1 pct to 10.1% of revenue compared to '22. Retail AUM reached 12.54 trillion yuan, +10.6% year on year. In an environment of market fluctuations, customer assets continued to grow rapidly; golden sunflower and above, private AUM +10.1%/+11.0% year on year. Other non-interest income was +14.9% year on year and +16.8pct compared to '22, mainly due to increased investment income from bonds and funds.

Credit investment has accelerated, and interest spreads have fluctuated slightly

Total assets, loans, and deposits at the end of March were +11.6%, +10.0%, +16.5% year-on-year (+9.6%, +8.6%, +18.9% compared to the full year of '22), and asset and loan expansion accelerated. The ratio of total loans to total assets was +0.60pct to 60.3% compared to the end of '22. Of the new loans added in Q1, retail/counterfeit/notes accounted for 27%/62%/11%. The Q1 quarterly net interest spread fell 8 bps to 2.29% from 22Q4, mainly due to loan repricing and declining returns on newly developed businesses, which led to a 2 bps decline in interest asset returns and loan returns 5 bps from Q4, respectively; at the same time, rising customer deposit costs caused the cost ratio of interest-bearing debt and deposit costs to rise 6 bps and 4 bps from Q4, respectively.

Asset quality is improving, hidden indicators are optimized

The non-performing rate and provision coverage rate at the end of March was -1 bp and -2pct to 0.95% and 448% compared to the end of '22. The balance of Q1 non-performing loans increased by 2.30 billion yuan compared to the end of '22, mainly affected by the further risk release of some highly indebted real estate customers. The decline in the non-performing rate was mainly due to the decline in the non-performing rate of retail loans driven by restorative economic growth. At the end of Q1, the parent company's non-performing rate for public and retail was the same as at the end of December, -1 bp. The overdue loan ratio at the end of March, focusing on loan ratios from -6bp and -9bp to 1.23% and 1.12% at the end of '22, the hidden risk indicators were optimized. The parent company's generation rate of non-compliance ranged from -0.07 pct to 1.09% in '22. The annualized credit cost of the parent company in Q1 was +0.23pct to 1.04% year-on-year, mainly due to the increase in loan provision expenses due to the increase in Q1 loan size.

Risk warning: Economic recovery fell short of expectations, and the deterioration in asset quality exceeded expectations.

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