Bank of Nanjing (601009) Non-public Issuance of Common Stocks Comment: Expected to Restart and Growth Expected
Bank of Nanjing has both growth and security. It will benefit from the loose volume and price environment this year, and the resumption of fixed growth is expected to eliminate the factors that gradually reduce the suppression of deformation.
Note: Bank of Nanjing intends to issue a non-public offering up to 16.
9.6 billion ordinary shares (not exceeding 20% of the total share capital during the issuance period), and the raised funds shall not exceed 14 billion U.S. dollars, all of which are core tier 1 capital after the issue expenses are excluded.
After the final increase plan was not approved by the CSRC last year, this year it was again proposed to increase the capital.
The company had proposed a non-public issuance plan in August 2017. The amount of issuance, funds raised and the issue price were the same as this plan, but the application was not approved by the CSRC in July 2018.
After a lapse of nearly one year, the company once again proposed a fixed increase plan, or it will mean that the capital replenishment boots have landed and usher in a new development period.
The current issue price is slightly higher than the current sustainable, and the lock-up period of mergers demonstrates shareholder confidence.
According to the issuance plan, the price of this issuance is about 8.
25 yuan / share (corresponding to 1 in 2018.
03xPB), slightly higher than the closing price of 8 on May 21.
13 yuan / share.
Among the four-year issuance targets, the lock-up period for the original shareholder Faba Bank, 天津夜网 Zijin Investment and the new shareholder Transportation Holdings was changed to 5 years (the three companies accounted for 78 of the total number of additional issues.
6%), the new shareholder Jiangsu Tobacco has a lock-up period of 3 years, and the lock-up period of the reorganization demonstrates the long-term confidence of the shareholder institution in the company.
Capital replenishment is at the right time to enhance future growth momentum.
Based on the static calculation of the data for the first quarter of 2019, the fixed increase will increase the company’s core tier 1 capital adequacy ratio and capital adequacy ratio.
66% to 10.
18% and 14.
44% will be in the forefront among listed cities / rural commercial banks.
In the past two years, due to capital constraints, the company’s capital inflation rate has dropped significantly. The total asset CAGR in 2017-18 was only 8.
1%, compared to 34 in 2014-16.
8% (except for capital reasons, regulatory constraints are also one of the reasons for expansion).
After the capital is consolidated, the company is committed to taking advantage of resource endowment and asset allocation capabilities to achieve better growth.
After the capital replenishment in 2019, the looser regulatory and liquidity environment will be expanded, and the company’s volume and price elasticity will promote the release to drive performance growth.
Looking ahead to 2019: 1) In terms of volume and price, a reasonable and abundant liquidity pattern, a looser regulatory environment, and tighter capital, the advantages of the company’s asset management will emerge, and the elasticity of volume and price will drive optimistic growth in revenue;On the other hand, if the new financial asset risk classification standards are implemented, non-performing assets may continue to be exposed (overdue for more than 90 days at the end of 2018 / non-performing assets 92.
18%, 2019Q1 attention and non-performing rate 1.
44% and 0.
89%), and increased requirements for non-credit asset provisions, credit costs are expected to remain high, but high provision coverage (2019Q1 is 415.
42%) The company is relatively calm in financial response.
Risk factors: Macroeconomic stall, asset quality exceeds expectations; fixed growth rate does not meet expectations.
Investment suggestion: Bank of Nanjing has both growth and security, and will benefit from the easing volume and price environment this year, and the resumption of fixed growth is expected to eliminate the factors that gradually reduce the suppression of estimates.
Maintain 2019/20 EPS forecast attributable to common shareholders1.
71 yuan, which currently corresponds to 0 in 2019.
Maintain the “overweight” rating.