Company profile
Bohai Bank is a national joint-stock commercial bank with its head office in Tianjin. It has 33 first-level branches (including directly affiliated branches), 30 second-level branches, 127 branches, 54 community small and micro branches, and set up a Hong Kong representative office, with a total of 245 outlets. The average total assets of the network is 4.6 billion yuan, and the average total loan is 2.9 billion yuan, ranking third and second respectively compared with all the national joint-stock listed commercial banks.
Sino-Thai viewpoint
National joint-stock commercial banks account for nearly 20% of the overall Bank of China Ltd. industry share: at present, there are 12 national joint-stock commercial banks in China, accounting for about 17.9% of the market share in terms of total assets. Compared with city commercial banks or other regional financial institutions, national joint-stock commercial banks can give full play to their advantages such as larger capital base, national sales network, diversified products and services, and advanced technological infrastructure. By the end of 2019, the company's net profit grew by 15.7% year-on-year, and the weighted average rate of return on net assets reached 13.71%, ranking first and third respectively compared with all national joint-stock listed commercial banks.
Operating results: in the fiscal year from 2017 to 2019, the company's operating income was 25.25 billion yuan, 23.21 billion yuan and 28.38 billion yuan respectively, of which net interest income accounted for 67.4%, 65.6% and 80.7% of the total operating income, respectively. the net interest margin was 1.6%, 1.46% and 2.03%, respectively, and the net interest margin was 1.77%, 1.54% and 2.21%, respectively. The tier one capital adequacy ratios were 8.12%, 8.61% and 10.63% respectively, which met the requirements of regulators, but lower than the average level of commercial banks in the same period; the total amount of loans and advances (excluding accrued interest) were 464.9 billion yuan, 565.5 billion yuan and 708.1 billion yuan respectively; non-performing loans were 8.1 billion yuan, 10.4 billion yuan and 12.6 billion yuan respectively, while the non-performing loan ratio was 1.74%, 1.84% and 1.78% respectively. The provision coverage rates are 185.89%, 186.96% and 187.73%, respectively; the total bond investment accounts for 12.4%, 14.5% and 15.0% of the total assets respectively; special purpose vehicle investments (trust plans, asset management plans, wealth management products and funds) account for 29.2%, 15.7% and 11.7% of the total assets respectively; and loans for small and micro enterprises account for 30.0%, 31.0% and 26.0% of the total loans, respectively. The net interest rates are 26.7%, 30.5% and 28.9%, respectively.
Valuation: based on 17.33 billion shares after the global public offering, the company's market capitalization is HK $823.2 to HK $86.3 billion, which is lower than the average of its peers in Hong Kong. In 1919, the company's price-to-earnings ratio was about 9-9.4 times, and the price-to-book ratio was about 1.01-1.05 times, which was higher than the average level of Hong Kong stocks. In terms of cornerstone, nine investors were introduced and subscribed for a total of $520 million. This time, the stable price is Jianyin International, which has a total of 7 projects in the past year, with a performance of 2 up, 3 down and 2 flat on the first day. We have counted that the bank's new shares did not rise on the first day of the year. To sum up, they were given 57 points and rated as "do not apply for purchase".
Risk hints: (1) the risk of market competition, (2) the deterioration of asset quality caused by the intensification of the epidemic and the economic downturn, (3) the narrowing of the net interest margin, the continuous pressure on the capital adequacy ratio, etc.
