On January 4, 2022, Bank of Lanzhou Co., Ltd. (hereinafter referred to as “Bank of Lanzhou”) issued the announcement on initial public offering of shares. The announcement showed that bank of Lanzhou started online and offline subscription simultaneously on January 5, with the subscription code of “001227”. The initial public Development Bank issued about 570 million RMB common shares, all of which were new shares without transfer of old shares.
The issue price is 3.57 yuan / share, and the corresponding P / E ratio is 22.97 times. The issuing price is lower than the net assets per share of 4.33 yuan after issuance, and the price to book ratio is 0.82 times, which is close to the average price to book ratio of the secondary market of urban commercial banks listed on a shares.
Relevant data show that the initial number of shares issued online is about 171 million, which is 30.00% of the number of shares issued this time.
The total amount of funds raised in this public offering is expected to be 2.033 billion yuan. After deducting the issuance expenses of 65 million yuan, the net amount of funds raised is 1.968 billion yuan, which will be used to supplement the capital, so as to support the continuous growth of business, improve the capital adequacy level, and improve the comprehensive competitiveness and shareholder value.
Bank of Lanzhou submitted the prospectus for initial public offering in 2016 and obtained the IPO approval from the CSRC in December 2021, which lasted for five years. If the IPO is completed and listed, Bank of Lanzhou will become the first A-share listed bank in Gansu Province, the second listed bank in Gansu Province, the 42nd A-share listed bank, and the 17th A-share listed city commercial bank.
market share ranks first among small and medium-sized banks in Gansu Province
Lanzhou bank, formerly known as Lanzhou City cooperative bank, was established on June 29, 1997. It is the first local legal person joint-stock commercial bank in Gansu Province. It was renamed Lanzhou Commercial Bank in May 1998 and Lanzhou bank in June 2008. The bank now has more than 4000 employees, 15 branches, 177 business outlets, holding 1 financial leasing company and participating in 6 rural banks.
As of June 30, 2021, the total number of shareholders of Bank of Lanzhou is 6983, including 184 corporate shareholders, accounting for 97.30% of the total share capital of the bank; There are 6799 natural person shareholders, accounting for 2.70% of the bank’s total share capital.
As of the issuance of new shares, the shareholders holding more than 5% of Lanzhou bank shares were Lanzhou Municipal Bureau of finance, Lanzhou state investment, Huabang holdings, Tianqing real estate and Shengda Group. As of July 31, 2021, Lanzhou bank had 27 state-owned shareholders, holding 32.44% of the total share capital.
According to the latest data, by the end of the third quarter of 2021, the total assets (consolidated caliber) of Lanzhou bank was 400.701 billion yuan and the total liabilities were 371.945 billion yuan; From January to September 2021, the bank realized an operating revenue of 5.982 billion yuan, a net profit of 1.293 billion yuan and a net profit attributable to the parent company of 1.254 billion yuan. As of June 30, 2021, the capital adequacy ratio of Bank of Lanzhou is 12.30%, the Tier-1 capital adequacy ratio is 10.20%, and the core Tier-1 capital adequacy ratio is 8.37%.
It is worth noting that the prospectus disclosed that bank of Lanzhou expects the company’s operating revenue to be RMB 7.815-7.932 billion in 2021, with a year-on-year increase of 7.00% – 8.60%; The net profit is expected to be about 1.577-1.687 billion yuan, a year-on-year increase of 2.90% – 10.05%.
In the ranking of “Top 1000 global banks” by Banker magazine in 2021, Lanzhou bank ranked 324th, an increase of 35 over the previous year; In the ranking of “top 100 Bank Of China Limited(601988) industry in 2021″ by Bank Of China Limited(601988) Industry Association, Bank of Lanzhou ranked 66th.
According to the summary of IPO prospectus issued by Bank of Lanzhou on December 14, 2021, as of June 30, 2021, the bank’s loan balance ranked first among small and medium-sized commercial banks in Lanzhou, with a market share of 11.98%, 4.3% higher than that of Bank of Gansu, which ranked second; Among the small and medium-sized commercial banks in Gansu Province, the loan balance ranks first, with a market share of 9.96%, 1.75 percentage points higher than that of Bank of Gansu, which ranks second.
As of June 30, 2021, Bank of Lanzhou ranked first in the deposit balance of small and medium-sized commercial banks in Lanzhou, with a market share of 21.77%, 11.51 percentage points higher than bank of Gansu ranked second; Among the small and medium-sized commercial banks in Gansu Province, the deposit balance ranks first, with a market share of 13.44%, 1.47 percentage points higher than that of Bank of Gansu, which ranks second.
13 of the 16 listed urban commercial banks rose
In terms of loan quality, Bank of Lanzhou disclosed in the prospectus previously released that as of June 30, 2021, December 31, 2020, December 31, 2019 and December 31, 2018, the bank’s non-performing loan balances were RMB 3.654 billion, RMB 3.407 billion, RMB 4.304 billion and RMB 3.683 billion respectively, and the bad loan rates were 1.71%, 1.75%, 2.44% and 2.25% respectively.
As of June 30, 2021, the top ten borrowers of Bank of Lanzhou had issued loans totalling RMB 13.877 billion, accounting for 6.48% of the bank’s total customer loans and 41.37% of its net capital. The total amount of corporate loans (excluding discount) accounts for 63.55% of the bank’s total loans, involving relatively concentrated industries such as construction industry, real estate industry, wholesale and retail industry and manufacturing industry. The loans of the four industries account for 16.45%, 14.40%, 13.28% and 10.02% of the total amount of corporate loans (excluding discount) respectively.
As of June 30, 2021, Bank of Lanzhou’s loans to public real estate, public construction and personal housing accounted for 33.53% of the bank’s total loans and advances.
In addition, the prospectus also mentioned that as of June 30, 2021, 68.84% of the bank’s loans came from customers located in Lanzhou, and most of its branches were located in Lanzhou.
According to the data, from 2016 to 2021, 8, 1, 3, 8, 1 and 4 banks landed in the A-share market every year, mainly small and medium-sized banks.
At the beginning of 2022, the A-share banking sector gained gratifying momentum. When Bank of Lanzhou may win the first place in the listing of A-share bank shares this year, the reporter of daily economic news combed the first day performance of 16 A-share listed urban commercial banks, and checked the rise and fall of the latest closing price of listed urban commercial banks compared with the initial offering price.
From January 1, 2014, the maximum increase on the first day of IPO is limited to 44% of the issue price. It can be seen that except Bank Of Beijing Co.Ltd(601169) , Bank Of Nanjing Co.Ltd(601009) , Bank Of Ningbo Co.Ltd(002142) listed earlier, the 12 listed urban commercial banks hit the maximum increase limit on the first day of listing.
Let’s look at the rise and fall of the closing price of 16 listed urban commercial banks compared with the initial offering price on January 5, 2022, of which 13 achieved an increase. Specifically, Bank Of Ningbo Co.Ltd(002142) , Bank Of Nanjing Co.Ltd(601009) , Bank Of Chengdu Co.Ltd(601838) , Bank Of Hangzhou Co.Ltd(600926) the latest closing price (post resumption right) increased by more than 100% compared with the initial price.
(Daily Economic News)
