1. IPO purchase proposal:

The bank is the leading rural commercial bank in China and the first in Guangdong Province. But according to Wind data, operating income (excluding loan loss provisions, net profit, etc.) has generally declined in recent years:

The bank is the fifth largest rural commercial bank in China, which is equivalent to Chongqing Rural Commercial Bank, the largest rural commercial bank in the country, in terms of average return on total assets and average return on net assets, but slightly weaker than the latter. It is also lower than other peers. In terms of defect rate, the bank (1.8%) is higher than Chongqing Rural Commercial Bank (0.98%), and is also on the high side compared with other rural commercial banks. Therefore, the bank valuation we take the valuation of Chongqing Rural Commercial Bank as the benchmark level, and adjust accordingly according to its own characteristics. Without considering the exercise of over-allotment rights, the total share capital of the company is about 9.59 billion shares, with a share price of 4. 99-5. 5%. The price-to-earnings ratio of the corresponding company of 27 Hong Kong dollars in 2016 is about 8. 5%. 16-8. 62 times, corresponding to the 2016 price-to-book ratio of about 1.10-1. 16 times, compared with Chongqing Rural Commercial Bank, the valuation is too high and it is not recommended to apply for purchase.

II. Comparison of valuation in banking and financial industry

IV. Brief introduction of Guangzhou Rural Commercial Bank (1551.l-IK)

According to the statistics of total assets, net assets, operating income and net profit for the year ended December 31, 2015, the bank is the leading rural commercial bank in China and the first in Guangdong Province. According to the ranking of the top 1000 global banks published by the British Banker ("The Banker") in 2016, the bank ranks 203rd in the world's commercial banks, 30th in China's commercial banks and 4th in China's rural commercial banks in terms of tier one capital. According to the top 2016 Chinese enterprises released by the China Enterprise Federation and the China Entrepreneur Association, the bank ranks 441st in terms of operating income, up 32 places from 2015, and is the only rural commercial bank selected for two consecutive years. According to the Guangzhou Branch of the people's Bank of China, as of September 30, 2016, the bank's deposits ranked third among all commercial banks in Guangzhou, with a market share of 10. 5%. 2%: the bank's loans rank fifth among all commercial banks in Guangzhou, with a market share of 7. 6%. 6%.

In recent years, the bank's business has continued to grow rapidly. The bank's total assets grew from 379.5 billion yuan on December 31, 2013 to 582.8 billion yuan on December 31, 2015, achieving a compound annual growth rate of about 23. 5%. As of September 30, 2016, the bank's total assets reached 592.5 billion yuan. From 2013 to 2015, the bank's operating income increased from 12139 million yuan to 16213 million yuan, achieving a compound annual growth rate of about 15. 5%. 6%. In the rapid development of business at the same time, the bank insists on sound operation and strict control of risks. As of September 30, 2016, the bank's non-performing loan ratio was 1. 5%. 79%, lower than the national average of 2.74% of rural commercial banks.

The bank provides customers with standardized and differentiated banking products and services through a diversified marketing network. As of September 30, 2016, the bank has 624 business outlets, including 618 in Guangzhou, ranking first among all commercial banks in Guangzhou. The bank's business outlets are widely distributed in urban and rural areas of Guangzhou. As of September 30, 2016, the bank's outlets in Guangzhou, which mainly serve rural areas and urban-rural border areas, rank first among all commercial banks in Guangzhou, accounting for about 85. 5% of all the bank's business outlets. 4%. In addition, as of September 30, 2016, the bank has five branches and one branch outside Guangzhou, located in Foshan, Qingyuan, Heyuan, Zhaoqing and Zhuhai in Guangdong Province. To broaden marketing channels and enhance customer experience, the bank also operates e-banking channels such as online banking, Wechat bank, mobile banking, self-service banking, VTM and telephone banking, as well as characteristic Internet financial service platforms such as direct selling banks, online financing platforms, electronic shopping malls and payment platforms, to provide customers with all-round and round-the-clock financial services.

The bank successfully built a diversified profit model, which laid a solid foundation for the healthy and rapid development of the business. In 2015, the bank achieved a net income of 2890 million yuan in fees and commissions, accounting for 17. 5% of the bank's operating income. 8%, higher than about 10. 5% of the urban commercial banks and rural commercial banks listed in Hong Kong in the same period. 7% average. We believe that the bank's investment banking business, wealth management business and asset custody business are ahead of all rural commercial banks in China. The bank successfully launched a direct financing tool for wealth management in 2015, and we believe it is the first rural commercial bank in China to carry out this business. In addition, the bank successfully issued SME credit asset securitization products in the same year. According to the ranking of bank financial management ability in the third quarter of 2016 released by Puyi standard, the bank's comprehensive financial management ability, wealth management product issuing ability, wealth management product richness and risk control ability all rank first in the country's rural commercial banks. In addition, the bank is the first rural commercial bank in the country to obtain the custodian qualification of securities investment funds.

V. the purpose of raising funds

Assuming a median price of 5. 13 Hong Kong dollars, it is estimated that the total net proceeds from the global offering (after deducting the underwriting fees and estimated fees payable in connection with the global offering, and assuming that the over-allotment option has not been exercised) will be about 72. 5%. 600 million Hong Kong dollars.