\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Key investment points
Event overview
Bank Of Hangzhou Co.Ltd(600926) announced that the Commonwealth Bank of Australia signed an agreement on the evening of February 28, 2022 to transfer 5% of its shares to Hangzhou urban investment and Hangzhou Stock Exchange respectively by means of agreement transfer. This transaction still needs the approval of Zhejiang regulatory bureau, the compliance confirmation of Shanghai Stock Exchange, and the transfer registration.
Core view
1. What is the impact at the transaction level? The impact is extremely limited. ① It does not affect the trading of circulation order. According to the announcement, the shareholding ratio of Commonwealth Bank of Australia (hereinafter referred to as CBA) is 15.57%. CBA transfers 5% of the shares to the two major state-owned assets agreements in Hangzhou, that is, through signing the transfer agreement over the counter, which will not affect the circulation trading. ② Equity is expected to remain stable. According to the announcement, the shares obtained by Hangzhou Chengtou and Hangzhou Jiaotou will be locked for five years. At the same time, the Commonwealth Bank of Australia promises that if 10% of the shares are successfully transferred, the remaining 5.56% of the shares will be locked for three years.
2. Why do foreign shareholders want to sell? The judgment is attributed to the adjustment of shareholders' own business strategy. (1) Their own business is in trouble. Affected by the lower interest rate and weak economic growth in Australia, the roe of the Commonwealth Bank of Australia has fluctuated downward since 2014, from 18.3% in 2014 to 13.5% in 2021. (2) Required for business model transformation. In the face of business difficulties, the Commonwealth Bank of Australia proposed to streamline its business by selling foreign investment in 2018. Since 2018, the Commonwealth Bank of Australia has continued to shrink its foreign investment and has sold its equity in BOCOM Kanglian, Australian investment exchange and other companies, as well as its life business in Indonesia, Australia and other places.
3. How to prospect the investment value? The share price of high growth targets is suppressed by the reduction of insurance assets in the short term, and continues to be optimistic in the medium and long term. (1) High growth: benefiting from location advantages and strategic promotion, Bank Of Hangzhou Co.Ltd(600926) profit growth is leading in the industry. 21q1-3 Bank Of Hangzhou Co.Ltd(600926) net profit + 26.2% year-on-year, ranking among the top five listed banks (excluding listed banks in 2022). (2) Looking ahead: high growth is expected to continue. ① In the short term, the change of equity does not affect the actual operation; ② In the medium and long term, the excellent asset quality lays a solid foundation for the rapid growth of profits, and the location advantage brings a broad space for business growth At the end of Bank Of Hangzhou Co.Ltd(600926) 21q3, the non-performing rate was only 0.90%, ranking the fourth lowest among listed banks, and the provision coverage rate was 559%, ranking the first among listed banks; In January 2022, the credit of Zhejiang Province and Jiangsu Province increased by 15.2% and 15.4% year-on-year, ranking among the top two provinces in China.
Profit forecast and valuation
It is estimated that the growth rate of Bank Of Hangzhou Co.Ltd(600926) net profit attributable to parent company from 2021 to 2023 will be 24.1% / 20.4% / 20.3%, corresponding to bps12 2 / 13.5 / 15.0 yuan. Maintain the target price of 19.89 yuan, corresponding to pb1.5 yuan in 202247x。 The current price corresponds to PB1 in 202206x, current price space 39%, buy rating.
Risk tip: macroeconomic stall and substantial exposure of adverse.
