20220223-招银国际-China_Banking_Sector_4Q21_Quarterly_Review_5页_763kb

报告摘要

CMB International Securities | Equity Research | Sector Update Summary

China Banking Sector Overview (4Q21 Quarterly Review)

Core Content

In the fourth quarter of 2021 (4Q21), the China banking sector showed improved fundamentals, although city banks faced challenges in asset quality and provisioning. The overall sector is expected to maintain stable asset quality and Net Interest Margin (NIM) in fiscal year 2022 (FY22E). State-Owned Enterprises (SOEs) are anticipated to outperform due to stronger fundamental improvements. The banking sector is maintained as an OVERWEIGHT recommendation, with PSBC (1658 HK) as the top pick, targeting a price of HK$7.70.

Key Performance Indicators

Non-performing loan (NPL) balance reached RMB 2.85tn at the end of 2021.
NPL growth was 20.3% YoY for city banks, compared to 5.4% YoY for the sector overall.
NPL ratio for SOEs and JSBs improved by 6 bps and 3 bps respectively in 4Q21, while city banks and rural commercial banks saw deterioration of 8 bps and 5 bps.
Special Mention Loan (SML) ratio dropped to 2.31%, indicating improved asset quality.
Provision coverage ratio for SOEs, JSBs, city banks, and rural commercial banks were 239%, 206%, 189%, and 129% at the end of 2021, respectively, with SOEs showing the most improvement in 4Q21.

Loan Growth Trends

Property loan balance reached RMB 52.17tn at the end of FY21, growing 7.9% YoY.
Mortgage balance was RMB 38.32tn, increasing 11.3% YoY.
Development loan growth slowed significantly, only rising 0.9% YoY.
SME loan balance increased 26.3% YoY to RMB 190.75tn, with low yields persisting.

Market Lending Rates and Profitability

Market lending rate and ordinary loan rate dropped 27 bps and 11 bps YoY, respectively, to 4.76% and 5.19%.
Sector LDR increased to 79.69%, reflecting efforts to optimize asset structure.
Sector NIM in 4Q21 was 2.08%, slightly compressed YoY but expanded QoQ.
Non-interest income contributed 19.8% of revenue in 2021, down 120 bps YoY.
Cost to income ratio rose to 32.08%, up 90 bps YoY.
Sector ROA dropped 8 bps from 0.87% in FY19 to 0.79% in FY21.

Valuation and Key Risks

PSBC (1658 HK) is rated BUY, with a target price of HK$7.70, implying a 0.92x P/B for 2021E and 0.85x P/B for 2022E.
The current P/B ratio for PSBC (H) is 0.73x, close to its historical mean of 0.72x.
Other stocks in the sector include CCB (939 HK) with a BUY rating, SPDB (600000 CH) with a HOLD rating, BOSH (601229 CH) with a BUY rating, CQRC (3618 HK) with a HOLD rating, and BOCS (601577 CH) with a HOLD rating.

Summary of Ratings and Target Prices

PSBC (1658 HK): BUY, TP: HK$7.70, Upside: 18%
CCB (939 HK): BUY, TP: HK$7.10, Upside: 20%
SPDB (600000 CH): HOLD, TP: CNY 9.34, Upside: 9%
BOSH (601229 CH): BUY, TP: CNY 9.04, Upside: 26%
CQRC (3618 HK): HOLD, TP: HK$2.80, Upside: -6%
BOCS (601577 CH): HOLD, TP: CNY 8.32, Upside: 2%

Key Viewpoints

The banking sector is expected to remain stable in terms of asset quality and NIM in 2022.
SOEs are better positioned for performance due to stronger risk control and higher provision coverage.
The slowdown in property loan growth is a concern, driven by weak development loan growth.
Banks are adjusting their LDR to counteract declining lending rates.
SME loan growth remains strong, but yields are low.
The overall market lending rate continued to decline in 4Q21, impacting profitability.

Risks and Disclosures

The report contains forward-looking statements and is based on CMBIS estimates.
Analyst Certification confirms that the views expressed reflect personal opinions and are not influenced by compensation.
Investment Banking Relationships exist between CMBIS and the issuers covered.
CMBIS Ratings define the potential returns for each stock.
The report is not investment advice and should be used with caution.
Important Disclosures highlight the risks involved and the fact that CMBIS is not a registered broker-dealer in the U.S. or Singapore.

This summary provides a concise overview of the key points, main views, and critical information from the CMB International Securities sector update report on the China banking sector for 4Q21.

展开完整摘要