\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 009 Bank Of Nanjing Co.Ltd(601009) )
Bank Of Nanjing Co.Ltd(601009) released the annual report of 2021 and the first quarter of 2022. In 2021, the net profit attributable to the parent company increased by 21%, the operating revenue increased by 18.7% year-on-year, other non interest income increased by 38.1%, the total assets, loans and deposits increased by 15%, 17% and 13% year-on-year, and the roe increased by 14.85% year-on-year. In the first quarter of 2022, the net profit attributable to the parent company increased by 22.3%, the operating revenue increased by 20.4%, other non interest income increased by 133.9%, and the total assets, loans and deposits increased by 8%, 11% and 13% compared with the beginning of the year. The non-performing rate is 0.9%, the provision coverage rate is 398%, and the core tier 1 capital adequacy ratio is 9.75%.
Key points supporting rating
The continuous high growth of scale and non interest income drives the high growth of performance
Bank Of Nanjing Co.Ltd(601009) 2021 annual report and 1 quarterly report showed high growth, driving the continuous improvement of the company’s profitability. The high growth of performance in 2021 mainly comes from scale, provision and non interest contribution. In 2022, it mainly comes from scale and non interest. Location and customer advantages promote the continuous and rapid growth of the company’s scale. Excellent investment ability drives the acceleration of income growth and continues to contribute to performance. At the same time, we are concerned that the net interest margin has continued to stabilize since the second half of the year. Although the net interest margin made a negative contribution year-on-year in the first quarter, it is estimated that it is basically stable month on month. In addition, the annual report also shows that the company has actively promoted the strategy of large retail and trading banks.
Valuation
The company has outstanding regional advantages, solid local customer base, outstanding competitiveness in investment capacity and government information business, and continues to promote strategic transformation. We gave the company an EPS of 1.80/2.08 yuan in 2022 / 2023, with a corresponding net profit growth rate of 16.1% / 15.5% (formerly 15.5% / 15.6%). At present, the stock price corresponds to a P / B ratio of 0.93x/0.80x in 2022 / 2023, maintaining the overweight rating. The company’s stock price on April 15 was 11.90 yuan, 9.4% lower than the forced redemption price of convertible bonds. We pay attention to the conversion of convertible bonds into shares.
Main risks of rating
The economic downturn led to asset quality deterioration exceeding expectations and regulatory control exceeding expectations.
