Shanxi Merchants Bank is the only provincial legal person city commercial bank in Shanxi Province. In terms of tier one capital as of the end of 2018, the group ranked 440th in the "Top 1000 Global Banks" list published by the Banker, with total assets of 227.2 billion yuan. By the end of 2018, the Group had 160 business outlets, covering all 11 prefecture-level cities in Shanxi Province.
Sino-Thai point of view:
China's commercial banks have been steady over the past decade but fierce competition. By the end of 2018, there were 134 city commercial banks in China, with total assets growing at a compound annual rate of 17.4% in the past five years. City commercial banks accounted for 16.4% of all commercial banks' total assets, and the non-performing loan ratio was 1.79%. In the past year, under the downward pressure on the macro economy, the revenue and profit growth rate of the city commercial bank industry has generally declined.
The company's performance has grown steadily and has a regional leading advantage. by the end of 2018, the company's operating income was 4.75 billion yuan, an increase of 8.4% over the same period last year, and the net profit attributable to shareholders reached 1.31 billion yuan, an increase of 6.5% over the same period last year. The company has a head office, ten branches, 150 branches and Qingxucun Town Bank, a subsidiary bank with 51.0% shares.
The loan structure has been optimized, and the retail business has the potential to grow as the leader of city commercial banks in Shanxi region, benefiting from the economic recovery brought about by the structural adjustment of the province in recent years. By the end of 2018, the total assets of Shanxi Merchants Bank was 227.248 billion yuan, and the net profit was 1.314 billion yuan. Total asset loans accounted for 43.2%, investment assets accounted for 33.8%, and loan quality as of the end of 2018. The non-performing loan ratio of Shanxi Merchants Bank was 1.87%, up 0.23% from the same period last year, mainly due to the operational difficulties of corporate borrowers in some manufacturing and wholesale and retail industries. Loans from manufacturing, mining and real estate industries account for 30.1% and 21.9% of the company's total loans, respectively. These two industries account for slightly higher loans than their peers, but the loan structure has been optimized in the past three years. Overdue loans are 2.52 billion yuan, accounting for 2.5% of the total loans, with a low level in the same industry of Fucheng Commercial Bank. In addition, the company's retail business is growing rapidly, with revenue growing by 66.7% in 2018, accounting for 22.6% of revenue.
In terms of valuation, the company's revenue growth and net profit margin are in the middle level of the industry, and the company's historical price-to-earnings ratio of 14.9 times earnings is in the upper-middle level of the industry. The price-to-book ratio is 1.22 times, slightly higher than the industry average. We give it 65 points, with a rating of "neutral", combining the company's position in the industry, performance and valuation.