Main points of investment
The performance grew steadily, and the spread decreased slightly. The company's revenue / return net profit in the first quarter of 2022 grew by 6.5% and 5.7% respectively compared with the same period last year. The profit growth is mainly driven by steady expansion of scale and higher growth of other non-interest income. From the point of view of the split structure: (1) net interest income is + 6.4% compared with the same period last year, in which the steady growth of interest-bearing assets (year-on-year + 8.2%, month-on-month + 6.2%) is the main driving factor. 22Q1 net interest margin is 2.10%, month-on-month downward 1bp, year-on-year downward 4bp, which is a slight drag on net interest income. The change of net interest margin of the company last year was better than that of comparable peers, and the decline in the first quarter of this year was smaller, showing stronger resilience. (2) the net income of handling fees is + 1.2% compared with the same period last year, and the growth rate has slowed down, which is mainly due to supporting the development of the real economy. The reduction of fees and profits has led to a decline in the handling fees of some public-related businesses; (3) other non-interest income is + 15.5% compared with the same period last year, mainly due to the growth of other income, such as insurance premium income. In terms of cost, the cost-to-income ratio in the first quarter was 17.4%, down 0.2pcts from the same period last year, while the cost-to-income ratio remained at a lower level among comparable peers; credit cost was 1.34%, up 0.2pcts from the same period last year.
Loans continued to expand in double digits and deposits grew steadily. In the first quarter of 2022, the company's total assets were 8.5% year-on-year, of which loans were + 10.8%, month-on-month + 4.5%, and loans accounted for 58.1% of interest-bearing assets, slightly lower than at the end of last year. From the perspective of credit investment, in the first quarter, the new loans contributed 79.3%, 12.9% and 7.8% to the public, retail and bill discount respectively, with the main increase in the contribution to the public. Compared with the same period last year, the increment of the retail contribution decreased significantly, and the increment of the bill discount contribution increased significantly, similar to the situation in the industry as a whole. In terms of debt, deposits are + 7.8% year-on-year and + 5.8% month-on-month, maintaining steady growth.
The defect rate remained unchanged from the previous month, the provision coverage rate and loan ratio increased slightly, and the asset quality maintained a positive trend.
At the end of the first quarter of 2022, the defect rate was 1.42%, unchanged from the previous quarter and the lowest in recent years; the provision coverage rate was 210%, a slight increase in 4.1pcts compared with the previous quarter, and the provision level increased quarter by quarter; and the loan ratio rose slightly to 2.98%. Overall, the company's asset quality maintained a positive trend in the first quarter of 2022.
In terms of capital, at the end of the first quarter of 2022, the company's core first-tier, first-tier and total capital adequacy ratios were 13.43%, 15.04% and 18.25% respectively. At present, the company's capital adequacy ratio is in the leading level in the comparable industry, the pressure of supplementary capital is small, and we can pay attention to the endogenous balance of capital in the medium term.
Earnings forecast and rating: we slightly adjust the company's EPS forecasts to 1.01 yuan and 1.07 yuan in 2022 and 2023, and expect net assets per share to be 9.13 yuan by the end of 2022. Based on the closing price on April 28, 2022, the PB at the end of 2022 is 0.52 times. We maintain a "prudent overweight" rating on the company.
Risk hint: the supply and demand of credit is weakening, and the bad is worse than expected.