\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Event:
On March 1, Bank Of Hangzhou Co.Ltd(600926) announced that the Federal Bank of Australia, the former largest shareholder, planned to transfer 297 million shares of the company to Hangzhou urban investment and Hangzhou Stock Exchange respectively by means of agreement transfer, with a transfer price of 13.94 yuan / share and a total share transfer price of 8.275 billion yuan. The transfer shall be subject to the approval and confirmation of the CBRC and the Shanghai Stock Exchange, and shall take effect after the transfer is registered in the China Securities Regulatory Commission.
Comments:
Hangzhou Finance Bureau will become the largest shareholder, and the company will not have too much reduction risk in the follow-up. According to the announcement of the company, after the completion of the transaction, Hangzhou Urban Construction Investment Group Co., Ltd. (hereinafter referred to as “Hangzhou urban investment”) and Hangzhou Transportation Investment Group Co., Ltd. (hereinafter referred to as “Hangzhou transportation investment”) will receive 5% shares respectively, accounting for 10% of the total issued share capital of Bank Of Hangzhou Co.Ltd(600926) in total; Accordingly, the shareholding ratio of Commonwealth Bank of Australia (CBA) will be reduced from 15.6% to 5.6%, and Hangzhou Finance Bureau will passively become the largest shareholder (with a shareholding ratio of 11.9%).
The transfer price is determined as 13.94 yuan / share based on 97% of the average transaction price in the 30 trading days before the signing date (excluding the day), corresponding to 1.17 times of the audited net assets per share in the latest period. According to the announcement of shareholders’ commitment to lock up shares issued on the same day, CBA will not dispose of any Bank Of Hangzhou Co.Ltd(600926) shares within three years after the signing of the transfer agreement (i.e. before February 28, 2025). Considering the strong economic development vitality and stable financial operation of Hangzhou at this stage, the subsequent reduction risk from the transferee is expected to be low.
According to the CBA announcement, the sale is mainly due to the strategic consideration of focusing on the core banking business of local and New Zealand. In recent years, CBA has continued to shrink its overseas business, such as the sale of global asset management companies and their securities platform business, and the sale of BOCOM Kanglian invested in China. Although CBA was the largest shareholder of Bank Of Hangzhou Co.Ltd(600926) in the past, it mainly played the role of financial investor and less participated in the substantive operation of the company.
The transferee Hangzhou urban investment and Hangzhou trading investment are state-owned enterprises in Hangzhou, and it is expected to expand the source and market of deposits in the future
Provide Bank Of Hangzhou Co.Ltd(600926) relevant resource support for construction projects.
Bank Of Hangzhou Co.Ltd(600926) deeply cultivate economically developed Zhejiang and other regions, with solid fundamentals. In the first three quarters of 2021, Bank Of Hangzhou Co.Ltd(600926) revenue and net profit attributable to the parent company increased by 20.0% and 26.2% year-on-year respectively, and the year-on-year growth rate increased by 4.2 and 3.1pct respectively compared with the interim report. While the growth rate of revenue and profit increased, the asset quality was further improved, the quarter on quarter ratio of non-performing loans showed a “double decline”, and the provision coverage rate rose to 559.42%. According to our recent research, the economic vitality of the beneficiary regions of the company is strong. Since the beginning of 2022, the credit supply has been “prosperous in both supply and demand”, and the business performance has strong support.
Earnings forecast, valuation and rating Bank Of Hangzhou Co.Ltd(600926) is rooted in economically developed Zhejiang and other regions. In recent years, with the continuous promotion of retail transformation, the growth rate of revenue and profit has been outstanding. Since the beginning of the year, Bank Of Hangzhou Co.Ltd(600926) credit has been in the process of “Pro cycle” and “positive cycle”. We maintain the company’s EPS forecast of 1.45 yuan / 1.71 yuan / 2.02 yuan from 2021 to 2023, and the corresponding Pb valuation of the current stock price is 1.23/1.11/0.99 times respectively, maintaining the “buy” rating.
Risk tip: credit easing is less than expected, and the downward pressure on the economy is increasing.
