Wuxi Bank (600908): Expansion and Efficiency Improvement

Wuxi Bank (600908): Expansion and Efficiency Improvement

Event: On 29th, Wuxi Bank released the 2018 annual report, and the company achieved operating income 31 in 2018.

900 million, +12 per year.

0%; net profit attributable to mother 11.

0 million yuan, ten years +10.


  The increase in performance was attributed to the expansion of scale, and asset impairment accrued and reorganized weighed on performance.

Wuxi Bank achieved net profit attributable to mothers in 201811.

0 million yuan, ten years +10.

1%, the growth rate decreased by 1 compared with the first three quarters.

7 averages, down by 1 from 2017.

3 units.

Daily net income is the initial growth of performance, with a contribution rate of 30.

5%, of which the contribution rate of large-scale banks and interest rate factors to performance growth were 29.

1%, 1.

4%, scale is the main reason for performance growth.

The actual asset impairment provision is +28 per year.

6%, dragging down performance growth (contribution increased by -20.


  Loan growth is accelerating, and geographical advantages are conducive to scale expansion.

As of the end of 2018, the scale of Wuxi Bank’s interest-earning assets was 1509 trillion, which was changed to +12.

5%, an increase of 0 compared with the end of the third quarter.

3 units.

Among them, the loan balance was 73.1 billion yuan, +10 in ten years.

7% (2018Q3: 13.


From the perspective of loan structure, the company’s loan is +13 for ten years.

9%, the proportion has declined (2018: 73.

9%; 2018H: 75.

0%); personal loan growth increased (2018: 13.

7%; 2018H: 8.

6%), the proportion rose to 14.


In March 18, the company issued 30 million convertible bonds with a core tier 1 capital adequacy ratio and a capital adequacy ratio of 10 respectively.

44%, 16.

81%, higher than the industry average.

  The company is located in Wuxi, a city with a good economic environment. In 2018, the city’s GDP exceeded 1.

1 trillion yuan, an increase of more than 7%, the growth rate jumped to the second in the province, a good external environment to create conditions for bank expansion.

  The non-performing ratio continued to decline, and the provision for provision increased significantly.Adverse consequences at the end of 20181.

24%, a decrease of 4 BP in the third quarter from the previous quarter, and a decrease of 14 BP in a year, which is only the same as that of Changshu Bank (1.


Pay attention to the loan rate and interest rate of 0.

68% (2018H: 0.

81%), focusing on short-term loans of -48.

1%, it is expected that the non-performing rate will continue to decline this year.

Loans overdue for more than 90 days are ten years-12.

7% (2018H: -5.

8%), accounting for 1 of total loans.

03% (2018H: 1.

09%), asset quality was further optimized.

The provision provision increased significantly, the provision coverage ratio was 235%, which increased by 6 percentage points month-on-month, increased by 41 indicators, and the risk resistance ability was enhanced.

  Investment suggestion: The economic environment of the bank in Wuxi is good, there is room for expansion of asset scale, and rapid growth in performance; the non-performing ratio continues to decline, provisioning increases significantly, and strict risk control asset quality is high.

It is estimated that the 杭州夜网论坛 net profit attributable to mothers will be 10 in 19/20.

1% / 9.

8%, corresponding to BVPS6.


8 yuan, current price 1.


95 times PB.

Target price for 2019 is 7.

6 yuan, corresponding to 1.

2 times PB, 16% of the current price space, given an “overweight” rating.

  Risk reminders: the risk of macroeconomic downturn; the policy risk of strict supervision; the credit risk; the market risk.