Depth-Company-Ningbo Bank (002142): Pragmatic and deep cultivation of local market profitability ranks among the top in the industry

In-depth * Company * Bank of Ningbo (002142): Pragmatic and deep cultivation of local market profitability ranks among the top in the industry

The Bank of Ningbo’s profitability remains outstanding, its performance growth rate and ROE level maintain the forefront of the industry, and the company’s asset quality performance is at a relatively high level in the industry. We believe this is an important factor in the premium level of the company’s larger industry center.

In view of the company’s long-term stable profitability and potential risk resistance, the company’s rating was upgraded from holding to buying.

  Key points of the support level Private market-oriented genes, pragmatic deep cultivation of the local market.

In the equity structure of Bank of Ningbo, the proportion of private enterprise shareholders and associated shares is significantly higher than that of listed banks, which brings the company a market-oriented gene that is 武汉夜生活网 different from other banks.

The company has stable leadership, pragmatic style, and entered the team to deeply cultivate the local market. The regional city share has clearly deviated from its peers, laying a solid foundation for the company’s stable growth in performance.

  Profitability remains at the forefront of the industry, and the income structure is more balanced.

Bank of Ningbo’s first quarter net profit increased by 20 each.

1% (vs. 2018 19.

9%), continue to maintain the forefront in the industry; the main business performance is good, and the profit before revenue / provision increase by 23.

4% / 25%.

The company actively develops credit, investment and other businesses to jointly promote the expansion of asset-side scale.

In comparison, the company’s income structure is more balanced than that of other listed city commercial banks.

In the first quarter, the company’s litigation fee income accounted for 22%, higher than other listed city commercial banks.

  Asset quality remains outstanding and performance is highly certain.

Thanks to regional economic advantages and a solid foundation for risk control, the asset quality of Bank of Ningbo remained excellent, and the NPL ratio at the end of the first quarter of 2019 was only zero.

78%, low among peers.

In addition, the provision of the Bank of Ningbo has been increasing (up to 521% in 2019Q1), and the risk resistance ability is strong.

Against the background of economic savings uncertainty, we believe Ningbo Bank’s performance is more certain than its peers.

  It is estimated that taking into account the company’s long-term stable profitability and ability to cope with risk defense, we slightly increase the Bank of Ningbo’s earnings per share in 2020/2021 to 3.

03/3.

59 yuan (was 2).

97/3.

44 yuan), corresponding to the previous net profit growth rate of 19 in 2019/2020.

0% / 18.

7% (was 19).

0% / 16.

4%), currently corresponding to the 2019/20 market surplus9.

71/8.

18x, the city’s net carbon dioxide 1.

70/1.

46x, upgrade rating from increase to buy.

  The main risks faced by the rating were that the economic downturn exceeded expectations, and strict financial supervision exceeded expectations.