High-quality Agricultural Commercial Bank in Southern Jiangsu, creating small and Micro Financial characteristics
Zhangjiagang Bank is a high-quality agricultural bank in southern Jiangsu with rapid transformation. As a small county agricultural and commercial bank, Zhangjiagang Bank has outstanding small and micro features, and is making a breakthrough to customers with smaller micro-loans (personal operating loans). The risk of this customer group is more dispersed and the pricing is relatively higher, which is conducive to optimizing bank interest spreads and asset quality. Since 2019, Zhangjiagang Bank has maintained more than double-digit asset growth, revenue and PPOP growth are in the forefront of listed agricultural banks, interest spreads are repaired and asset quality continues to improve. We thinkZhangjiagang BankWith all the conditions for doing a good job in small and micro business, the promotion of transformation is expected to continue to improve profitability and the quality of development. We predict that the company's return net profit growth rate from 2019 to 2021 will be 13.0%, 13.7% and 14.9%, respectively, with a target price of 0.52 yuan, 0.59 yuan and 0.68 yuan, with a target price of 6.95-7.26 yuan, maintaining the "overweight" rating.
Small and micro business: broad space and complete conditions
Small and micro enterprises are related to the national economy and people's livelihood, regulators give firm support, agricultural and commercial banks should stick to their position. Zhangjiagang Bank small and micro business development momentum is good, can enjoy the policy dividend, we think it has the momentum to continue to do well. First of all, southern Jiangsu, as one of the most active areas of private economy in China, Zhangjiagang City has a large number of high-quality small and micro main bodies, which provides a source of customers for Zhangjiagang Bank. Secondly, as a local agricultural and commercial bank, Zhangjiagang Bank has a better understanding of local enterprises and has a good risk control ability. Finally, Zhangjiagang Bank has a certain number of branches in other places, which can promote the experience of small and micro services. As one of the first batch of cross-regional development of agricultural and commercial banks, the stock is large, and at present, the company attaches importance to the business in different places, and the expansion of assets in different places is an important driving force for the development of Zhangjiagang Bank.
Financial indicators: driven by transformation, performance for the better
Small and micro transformation has led to a multi-dimensional improvement in the fundamentals of Zhangjiagang. From January to September 2019, the revenue and net profit of Zhangjiagang Bank increased by 30.1% and 14.0% respectively compared with the same period last year, among which the revenue growth rate was the highest in listed agricultural and commercial banks. There are three main reasons for the rapid growth of profits: first, the scale is expanding rapidly. Since the end of September 2018, the loan growth rate of Zhangjiagang Bank has remained above 20% for five consecutive quarters. The demand for personal operating loans in Zhangjiagang is abundant, but the supply of financial institutions is limited, so the small and micro entities have become an important driving force for the loan growth of Zhangjiagang Bank. Second, the pricing of small and micro loans is relatively high, driving the net interest margin of Zhangjiagang Bank to continue to strengthen. Third, the personal operating loan borrowers have strong repayment ability and willingness, and the credit risk is dispersed and controllable, which leads to the continuous improvement of the asset quality of Zhangjiagang Bank.
The small and micro transformation is basically oriented to the good, with a target price of 6.95 yuan and 7.26 yuan.
Zhangjiagang Bank has superior location conditions, outstanding small and micro features and strong sustainability, and the small and micro transformation leads to a continuous improvement in fundamentals. It is suggested to seize investment opportunities. We predict that the growth rate of the company's return net profit from 2019 to 2021 is 13.0%, 13.7% and 14.9% respectively (9.1%, 9.0%, -) in the previous forecast, corresponding to 0.52 yuan, 0.59 yuan, 0.68 yuan (0.50,0.55 yuan, -) in the previous forecast, and BVPS6.05 yuan in 2020, corresponding to PB0.92 times. On January 21, 2020, the Wind of comparable A-share listed Agricultural and Commercial Bank of China unanimously predicted that the PB will be 1.00 times, the company's transformation is advancing rapidly, and the expected improvement in fundamentals is strong, which determines that the company should enjoy the valuation premium. We give the 2020 target PB1.15-1.20 times, and the target price is raised from 5.86-6.13 yuan to 6.95-7.26 yuan, maintaining the "overweight" rating.
Zhangjiagang Bank (002839) made a small and micro transformation, and the situation was clear.