Ping An Bank (000001): Increase in provision accruals and bad identification

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Ping An Bank (000001): Increase in provision accruals and bad identification

Summary and suggestions: Ping An Bank released its 2019 results, and the company’s revenue in 2019 was 1,380 billion, an increase of 18 year-on-year.

2%, realized net profit of 28.2 billion, an increase of 13 year-on-year.

6%, of which 4Q single-quarter net profit of 44 billion, an increase of 4 year-on-year.

9%.

The company’s annualized ROE was 11.

3%.

The growth rate of the company’s net profit in the fourth quarter of 2019 decreased somewhat, mainly due to the consequences of the company’s bad generation in the context of worsening bad identification, and the need for dial provision provision.

From the perspective of income, the growth rate is acceptable.

We are optimistic about the company’s efforts in retail business, fintech and customer volume driven by Ping An Group.

In summary, we maintain our “buy” investment recommendation.

  Ten-year net profit in 2019 increased by 13.

6% to 28.2 billion: Ping An Bank realized revenue of 138 billion in 2019, an increase of 18 year-on-year.

2%, realized net profit of 28.2 billion yuan, an increase of 13.
.

6%, corresponding to ROE11.

3%.

We calculate that the company’s revenue in 4Q2019 increased by 16.

5% to 35 billion, net profit increased by 4.

9% to 4.4 billion.

The company issued a dividend plan to reduce the distribution of dividends.

218 yuan, the dividend distribution rate increased by 5pct to 15% over the past two years, and the current exchange rate is 1.

50%.

  Bad write-offs have intensified, and 深圳桑拿网 bad expectations have become serious: From the perspective of asset quality, the company’s non-performing rate declined in the fourth quarter of 2019, recording a 1.

65%, down from the previous month.

03pct, we think it is mainly because the company added bad write-offs at the end of the year.

From the perspective of the ability to resist royalties, the company’s provision coverage ratio in the fourth quarter of 2019 recorded 183%, but it decreased by 3pct from the previous quarter.The first disclosure of the deviation of loans that are overdue for more than 60 days is less than 100%. It can be seen that the asset classification is worsening, and it is aware of the serious trend and the need for additional provisions.Brought about bad generation.

  The asset and debt side expanded rapidly: From the asset side, loan balances in the fourth quarter of 20192.

32 trillion, an increase of 16 over the end of last year.

3% of which personal loans 1.

36 trillion, an increase of 17.

6%.

In terms of marginal trends, loans in the fourth quarter of 2019 increased by 8 compared with the third quarter of 2019.

0%, recording a faster growth rate.

As of the fourth quarter of 2019, the balance of Ping An Bank’s debt deposits was 2.

44 trillion yuan, an increase of 14 from the end of the previous year.

5%, of which personal deposits increased by 26.

4% to 583.7 billion, reflecting the company’s rapid make-up on the retail debt side.

In terms of marginal changes, deposits in the fourth quarter of 2019 increased by 6 compared with the third quarter of 2019.
4%, to achieve faster debt-side expansion.
  Revenue growth was steady: Ping An Bank’s net fee and commission income YOY increased by 17 in the fourth quarter of 2019.

4% to 8.9 billion, estimated to be driven by bank card, agency, commission and other businesses, the index net income YOY increased by 17.

2% to 23.2 billion, of which 4Q2019 spreads were flat month-on-month, recording 2.

73%.

In the fourth quarter of 2019, the company’s net profit growth rate has improved, and we believe that it was mainly due to the company’s overall poor net income increased in the fourth quarter of 2019 under a badly recognized and strict background, creating pressure to make provisions (4QThe impairment loss in a single quarter was 18.5 billion, a year-on-year increase of 30%).

  Earnings forecast and investment advice: Considering that the macro-adverse cycle adjustment behind the epidemic has increased and LPR is under downward pressure, we believe that the banking industry may have asset-side adjustments in 2020. In this context, we expect Ping An BankIn 2020, net profit will be 31.5 billion and 35.8 billion in 2021, a year-on-year increase of 11.

8%, 13.

5%, currently corresponding to PE8.

5X, 7.

5X, PB0.

95X, 0.

86X, estimated to be at a reasonable level.

The results of the company’s retail business and the quality of its assets have been recognized by the market, and it has continued to make efforts in technology. We are optimistic about the company’s future development and give “buy” investment advice.

  Risk warning: Macroeconomic downturn unexpectedly under the background of epidemic shock, LPR downside unexpectedly