\u3000\u3000 Bank Of Nanjing Co.Ltd(601009) (601009)
Event: Bank Of Nanjing Co.Ltd(601009) announced on the evening of January 16, 2022 that it planned to acquire the controlling interest of Suning Consumer Finance Co., Ltd. The board of directors of the company deliberated and approved the acquisition proposal, and has not signed any equity transfer agreement at present.
Comments:
1. The development of Suning consumer finance is unfavorable, and its business is shrinking. Suning consumer finance is an earlier established industrial consumer finance company. It opened in May 2015 and has been operating for more than six years. It Suning.Com Co.Ltd(002024) owns 49% equity and is the largest shareholder, with certain financial advantages. Affected by the deterioration of the operating conditions of major shareholders Suning.Com Co.Ltd(002024) , the decline of the overall development of offline 3C installment business, the tightening of Internet financial supervision, insufficient capital and other factors, the performance has declined significantly in recent years. As of 2021h, the total assets of Suning consumer finance were only 1.115 billion yuan; In 2021h, the operating income was 106 million yuan and the net loss was 34 million yuan.
2. Bank Of Nanjing Co.Ltd(601009) has formed a mature consumer finance business model, and CFC is developing well. Bank Of Nanjing Co.Ltd(601009) the consumer finance center (CFC), established in cooperation with BNP Paribas in 2007, adopts the organizational structure of business division system and is a profit center with independent accounting. CFC has positioned the mid-range population, built a complete product system and perfect customer acquisition channels, integrated international advanced experience and local wisdom, built risk control capability, and achieved continuous growth of performance. By 2021h, CFC had served nearly 22.5 million customers, the balance of consumer loans was 44.9 billion yuan, and the non-performing loan rate was lower than that of peers.
3. Bank Of Nanjing Co.Ltd(601009) obtaining the controlling stake in Suning consumer finance is of strategic significance, and the performance contribution can be expected. Holding Suning consumer finance company can supplement the short board of the license, break the restrictions on business areas, expand its business scope to the whole country, expand the scope of online traffic, and the licensed institutions are in the period of regulatory dividends. Based on their own ability advantages, the development of the consumer finance center is expected to reach a higher level after obtaining the license. Bank Of Nanjing Co.Ltd(601009) is accelerating the implementation of the large-scale retail strategy and the balanced development of multiple modes of personal loan business. After CFC is completely independent, its business and Bank Of Nanjing Co.Ltd(601009) consumer loan products maintain complementarity in customer positioning and operation mode, providing a multi-level and differentiated product system. The consumer finance market has a broad space. After Bank Of Nanjing Co.Ltd(601009) is licensed, Suning consumer finance company will become a banking consumer finance company. The capital side financing channels and financing capacity are expected to be improved, the asset side regional restrictions are eliminated, and the market space is opened. The company can expand its business and obtain greater market share with the ability accumulated by CFC operation for many years. The loan scale of 2021h Bank Of Nanjing Co.Ltd(601009) CFC is 44.9 billion yuan. We expect that the total loan balance will be 100 billion yuan in five years.
Investment suggestion: the company is steady and upward, and continues to recommend. High roe and low value of the company: 2021e and 2022epb0 90X/0.77X； PE6. 27x / 5.41x (City Commercial Bank pb0.83x / 0.74x; pe7.28x / 6.39x). The company has sound fundamentals and strong profitability, and can expect sustained and steady development in the future: Bank Of Nanjing Co.Ltd(601009) excellent management and developed regional economy; The bank is promoting the strategic transformation of its large retail and trading banks. We continue to recommend the issuance of convertible bonds to consolidate the capital adequacy ratio and ensure its rapid growth.
Risk tips: the economic downturn is more than expected, the company's operation is less than expected, and the process of acquiring controlling rights is lower than expected
