\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 009 Bank Of Nanjing Co.Ltd(601009) )
Report guide
The market-oriented layout and reform are expected to drive the performance to exceed expectations.
Key investment points
Leading high-quality small and medium-sized banks
Location advantages: the business area covers the Yangtze River Delta and Beijing, with developed location economy and wide space for credit growth. In January 2022, the credit growth rate of Zhejiang and Jiangsu was 15.2% and 15.4%, ranking among the top two provinces in China. The equity is stable, the ownership structure is dominated by state-owned assets (accounting for about 45%), supplemented by foreign capital, the equity is decentralized and the governance is perfect; Since 2020, the management and state-owned shareholders have increased their holdings, showing strong business confidence. Profitability and operating indicators are in the forefront of listed urban commercial banks, with roe the third highest, non-performing rate the third best and provision coverage the fourth highest.
Marketization is expected to exceed expectations
The market believes that: Bank Of Nanjing Co.Ltd(601009) is mainly government business, which is not market-oriented.
We believe that: Bank Of Nanjing Co.Ltd(601009) market-oriented layout and reform are expected to exceed expectations.
I. strategic layout: Bank Of Nanjing Co.Ltd(601009) the choice of strategic direction highlights the thinking of market-oriented operation Bank Of Nanjing Co.Ltd(601009) strategy focuses on retail and trading banks (essentially small, medium and micro enterprises), and its strategic positioning highlights its market-oriented business thinking. Compared with the traditional corporate business, the retail customer base and the customer base of small, medium-sized and micro enterprises are more small and scattered. The core competitive factors are market-oriented factors such as product creation ability, financial technology ability, customer service ability and so on.
II. Supporting layout: the trading bank and retail play and channel layout meet the market-oriented upgrading.
1. Business layout: Bank Of Nanjing Co.Ltd(601009) product system is perfect and the playing method is upgraded
(1) perfect product system of transaction bank. ① Focus on specialization and innovation. In September 2021, Bank Of Nanjing Co.Ltd(601009) launched a special action to launch comprehensive financial services including credit, equity financing, M & A and reorganization for "specialized and special new" enterprises, joint investment institutions, securities firms, law firms and other institutions, with a flexible service system. By the end of 2021, it has provided comprehensive services to more than 250 national and more than 520 provincial "specialized, special and new" customers. ② Service platform upgrade. In October 2021, Bank Of Nanjing Co.Ltd(601009) released the growth version of Xin e-companion. Through cooperation with head platforms such as jd.com and UFIDA, it created a full scene ecosystem and upgraded the customer service system of small, medium and micro enterprises. By the end of 2021q3, there were 42000 contracted customers of Xine companion growth version, and 20000 new customers were added in a single quarter in the third quarter.
(2) the playing method of retail business has been comprehensively upgraded. ① In terms of consumer finance, Bank Of Nanjing Co.Ltd(601009) announced that it plans to acquire the controlling interest of Suning consumer finance company. If it is successfully implemented, it can supplement the consumer finance license through market-oriented investment banking means to catalyze business development Bank Of Nanjing Co.Ltd(601009) consumer fund business roa2 in 201907%, higher than the ROA of the whole bank, and business promotion can support the profitability of the whole bank. ② In terms of private wealth, Jiangsu has a developed economy, and the number of high net worth people ranks among the top in China. It is a fertile land for the development of private wealth Bank Of Nanjing Co.Ltd(601009) actively grasp the outlet of wealth management and promote private banks to the first level Department of the head office, which is expected to catalyze the development of private banks' wealth business.
2. Network layout: Bank Of Nanjing Co.Ltd(601009) 's offline network layout has expanded significantly
According to the 2021 interim report, Bank Of Nanjing Co.Ltd(601009) plans to increase the number of outlets from 200 at the end of 2020 to 300 by the end of 2023, corresponding to an annual growth rate of 20%, focusing on Jiangsu Province. Physical network expansion will enhance the ability of offline channels and open the space for asset growth. Assuming that the average net assets remain unchanged, in the medium and long term, after the network expansion, the asset growth space is expected to increase by 50%, supporting the profit growth.
III. management mechanism: a market-oriented mechanism has been formed, and the sustainability of strategic results is expected to exceed expectations.
1. Marketization of management: Bank Of Nanjing Co.Ltd(601009) implemented the reform of professional managers in 2020, that is to stimulate the enthusiasm of management and improve the operation efficiency of the company by means of market-oriented selection and employment and differentiated salary. Among the current management team, the chairman has rich experience and strong ability to control the overall strategic situation; The new President Lin Jingran (born in 1974) is the youngest president of listed banks (other than rural commercial banks), who is in his prime of life and active and promising; The seven Vice Presidents were selected through the professional manager mechanism to enrich the management leadership of the head office.
2. Excellent incentive mechanism: Bank Of Nanjing Co.Ltd(601009) incentive mechanism is market-oriented. The per capita salary, per capita income and per capita profit are ahead of the benchmarking banks. Employees with bachelor degree or above account for 95%, ranking first among listed urban commercial banks.
3. Business performance: since the new management was in place in 2020, Bank Of Nanjing Co.Ltd(601009) business quality and efficiency have improved. In terms of profit, the 2021q1-3 Bank Of Nanjing Co.Ltd(601009) profit increased by 22.4% year-on-year, accelerating by 5.3pc compared with 2021h1. The growth rate in listed city commercial banks increased significantly from the ninth in 2019 to the top four. In terms of non-performing, the non-performing rate of 2021q3 was flat at 0.91% month on month, and remained low.
The current valuation is cost-effective
As of the closing on March 4, 2022, Pb of Bank Of Nanjing Co.Ltd(601009) 2022 is only 0.84x, which is extremely cost-effective compared with other high-quality banks such as Bank Of Ningbo Co.Ltd(002142) (1.7x), Bank Of Hangzhou Co.Ltd(600926) (1.1x), Bank Of Chengdu Co.Ltd(601838) (1.0x).
Profit forecast and valuation
Looking forward to the future, benefiting from the market-oriented business layout and economic location advantages, Bank Of Nanjing Co.Ltd(601009) profit growth is expected to remain at the forefront of the industry. It is estimated that the year-on-year growth rate of net profit attributable to parent company from 2021 to 2023 will be + 22.40% / + 18.20% / + 18.37%, bps10 90 / 12.29 / 13.93 yuan shares. The current price corresponds to 0.95/0.84/0.74xpb from 2021 to 2023. The target price is 16.00 yuan / share, corresponding to 1.30xpb in 2022, with a buy rating.
Risk tip: macroeconomic stall and substantial exposure of adverse.
