If you have to add a definition to the operating conditions of Chongqing Bank over the years, it must be "stable".
21 A-share first bank IPO fell Chongqing Bank (601963.SH,01963.HK), it is also the first "A+H" listed city commercial bank in the west. As early as 2013, Chongqing Bank successfully completed its H-share IPO, winning the lead in listing in mainland city commercial banks in Hong Kong. After eight years, this city commercial bank's "leader" is still running in the first echelon.
As of the end of June 2020, the asset scale of Chongqing Bank reached 532.2 billion yuan, ranking among the forefront in the western region. At the same time, the bank has obtained the highest standard-to-pop long-term entity credit rating of "BBB-", a city commercial bank, and has become the first bank among western financial institutions to obtain an investment-grade rating.
As the A-share door was opened, A-share investors also expressed their recognition of this rating with enthusiastic subscription. It is disclosed that the initial effective subscription multiple of Chongqing Bank IPO online is close to 2,700 times, and the initial winning rate is less than 4/10,000, and the winning rate is lower than the lottery winning rate. Given that the initial subscription multiple exceeds 150 times, the issuer and the joint lead underwriter decided to launch a callback mechanism and place 90% of the new shares in online channels.
On the day of its listing on February 5, Chongqing Bank hit the daily limit at the opening, and its stock price rose 44.04% to 15.60 yuan from the issue price of 10.83 yuan. As of the midday closing, more than 170,000 orders were closed on the daily limit.
New stocks were robbed so wildly, why is Chongqing Bank ?
IPO initially valid subscription nearly 2700 times
Chongqing Bank was established on September 2, 1996. It is a city commercial bank established by the original shareholders of 37 urban credit cooperatives and 1 municipal cooperative, 39 enterprises and institutions including Chongqing Jingtong Industrial Corporation, and 10 local finance bureaus including Chongqing Finance Bureau . In 2007, it was renamed Chongqing Bank Co., Ltd. .
In 2013, Chongqing Bank initially issued H shares, becoming the first mainland city commercial bank to be listed on the Hong Kong Stock Exchange. This year, Chongqing Bank completed its initial public offering on A-shares, becoming the third city commercial bank in the country and the first "A+H" stock in the West to be listed at the same time.
Among the many city commercial banks in China, Chongqing Bank has always been upstream. As of the end of September 2020, the asset scale of Chongqing Bank was 546.9 billion yuan, ranking 10th among A-share listed urban commercial banks, and second only to Chongqing Rural Commercial Bank among Chongqing local commercial banks (legal person caliber). Judging from profit indicators, in the first three quarters of 2020, the rate of return on net assets (ROE) of Chongqing Bank reached 15.49%, ranking fifth among A-share listed urban commercial banks.
in the 2019 ranking of the 10,000 banks in the UK magazine "Banker" in 2019, Chongqing Bank ranked 247th, up 5th place from the previous year; in 2019, Chongqing Bank won the 7th place in the comprehensive evaluation of urban commercial banks in the 2018 gyro system evaluation of the China Banking Association, up two places from 2017: Brand Finance's "2021 Global Bank Brand Top 500" ranking was announced, Chongqing Bank ranked 206th, with the largest increase in ranking, up 53 places from 2020. In 2019 and 2020, Standard & Poor's International Rating Company successively awarded Chongqing Bank "BBB-" investment grade ratings, with an outlook of "stable".
In this A-share IPO, investors expressed their recognition of Chongqing Bank with real money. According to the preliminary inquiry results, Chongqing Bank finally determined that the issuance price is 10.83 yuan per share, the issuance price-earnings ratio is 8.97 times, and the issuance price-to-book ratio is 1 times.
According to the Shanghai Stock Exchange, the number of initial valid subscription accounts issued by Chongqing Bank online issuance is 14.7748 million, the number of valid subscription shares is 280.415 billion shares, and the effective subscription multiple is as high as 2690.21 times. The initial online winning rate is only 0.037%, which is comparable to winning the lottery. Given that the initial effective online subscription multiple exceeds 150 times, this issuance has launched a callback mechanism, and 90% of the new shares will be issued online.
On the day of its listing on February 5, Chongqing Bank opened at a daily limit of 15.60 yuan, up 44.04% from the issue price. After a brief opening in the middle, it continued to block the daily limit. As of the midday closing, more than 170,000 orders were closed on the daily limit.
In fact, the enthusiasm of investors is not difficult to understand. On the eve of Chongqing Bank’s listing, many brokerages have published articles optimistic about its future stock price. GF Securities Research Report previously predicted that as of the close of January 18, 2021, the median valuation of 14 A-share listed urban commercial banks PB (LF) is 0.90 times. Referring to the current valuation level of urban commercial banks, and taking into account the development strategy, corporate governance, profitability, risk status and other factors of Chongqing Bank , it is believed that the reasonable value of Chongqing Bank A-share listed in 2021 is 12.64-15.17 yuan per share.
Profit steadily increases, bad debts steadily decrease
If you have to add a definition to the operating conditions of Chongqing Bank over the years, it must be "stable".
In 2017, 2018, 2019 and January-September 2020, Chongqing Bank achieved operating income of 10.145 billion yuan, 10.84 billion yuan, 11.948 billion yuan and 9.887 billion yuan, with year-on-year growth rates of 5.86%, 8.24%, 12.40% and 14.22% respectively; during the same period, the net profit attributable to shareholders was 3.726 billion yuan, 3.77 billion yuan, 4.207 billion yuan and 3.894 billion yuan, respectively, with year-on-year growth rates of 6.39%, 1.18%, 11.61% and 4.66%, respectively, and the performance achieved continuous and steady growth.
Chongqing Bank The main source of profit growth is net interest income. Since 2017, the bank's net interest income has accounted for more than 60% of its operating income. In the first half of 2020, this data was close to 80%, and the growth of net interest income was mainly due to the expansion of interest-bearing assets and the improvement of net profit spread.
Among them, the improvement of net profit gap is particularly difficult. From 2017 to January-June 2020, the net profit spread of Chongqing Bank rose from 1.89% to 2.13%. This is mainly due to the bank's strengthening pricing control through the asset side and controlling deposit costs on the liability side, which has led to a rise in net profit gap.
It is worth noting that since we have always adhered to the business philosophy of "deposit banking immediately", the source of liabilities of Chongqing Bank is mainly low-cost and stable deposits. Since 2017, the proportion of deposits to total liabilities has remained above 60%. Since 2019, as the proportion of the company's low-cost liability sources remains stable and the pressure to rise in deposit costs is eased, coupled with the downward trend in capital costs in the interbank market, the interest-bearing liability cost ratio has dropped by 20BP to 2.92% year-on-year.
In addition, the cost-income ratio of Chongqing Bank has been maintained at a low level. In the first half of 2020, the bank's cost-to-revenue ratio was only 17.6%, which was only higher than that of Bank of Beijing, , Shanghai Bank and Zhengzhou Bank among A-share listed urban commercial banks. This shows that the bank has good cost expenditure control, high operating efficiency and refined management level, which is reflected in its performance, which is a real decline in cost and expenses and an increase in profits.
On the other hand, during the steady growth of performance, Chongqing Bank did not give up on the control of asset quality.
As of the end of June 2020, the non-performing loan ratio of Chongqing Bank was 1.24%, down 0.03 percentage points from the beginning of the year, and the asset quality is stable and improving. Horizontal comparison, data from the China Banking and Insurance Regulatory Commission showed that the overall non-performing loan ratio of commercial banks was 1.94% at the end of the second quarter of 2020. In other words, the asset quality of Chongqing Bank is much better than the overall situation of commercial banks.
After the COVID-19 epidemic, in the context of supervision encouraging finance to support the real economy, commercial banks generally face the threat of deteriorating asset quality and rebounding of non-performing loan rates. Judging from the data released by Chongqing Bank , its non-performing loan ratio at the end of the third quarter of 2020 was only 1.23%, a further decrease of 0.01 percentage points from the end of June, and performed better than most A-share listed banks in the same period.
At the same time, Chongqing Bank has made sufficient preparations in preventing and controlling risks. As of the end of June last year, the capital adequacy ratio, Tier 1 capital adequacy ratio and core Tier 1 capital adequacy ratio were 12.84%, 9.76%, and 8.52%, respectively, both higher than regulatory requirements. It is disclosed that after deducting issuance fees, all funds raised from this IPO will be used to enrich the bank's core tier 1 capital and improve capital adequacy ratio. At the same time, its provision coverage ratio is as high as 302.17%, twice the regulatory requirements, and the security boundary is stronger.
is based in Chongqing and radiates to the western
In 2020, the construction of the "Chengdu-Chongqing Twin Cities Economic Circle" has been elevated to a national strategy, based on the core of the Chengdu-Chongqing urban agglomeration, and fully integrates into the national strategy. Based on , Chongqing Bank , will undoubtedly usher in greater development opportunities.
GF Securities research shows that the growth of total assets and core liabilities of Chongqing Bank shows a high correlation with Chongqing's economic growth rate. In the first quarter of 2020, due to the impact of the new crown pneumonia epidemic, Chongqing's economic operation faced certain pressure in the short term. However, since the second quarter of 2020, Chongqing's economy has gradually recovered, and the scale growth of Chongqing Bank has also shown a positive trend.
As of the end of June 2020, Chongqing Bank has a total of 143 branches, including the head office business department, small enterprise credit center and four first-level branches. The outlets cover all 38 districts and counties in Chongqing, and 26 off-site branches have been established in western provinces such as Sichuan, Shaanxi and Guizhou.
Chongqing Bank 's loans, deposits and profits mainly come from Chongqing. As of the end of June 2020, more than 80% of the bank's customer loans were issued to business institutions in Chongqing. On the one hand, this will help Chongqing Bank share the achievements of Chongqing's economic development in recent years and obtain a rare high-growth opportunity in the period of high and low economic growth in the period of high and low changes in the national economic growth rate; on the other hand, this is also the inherent meaning of urban commercial banks to take root in the local area and serve the real economy.
prospectus shows that in the Chongqing Bank's asset structure, the proportion of loans has increased day by day. In fact, it is precisely because loans account for a high proportion of interest-generating assets that the yield on interest-generating assets of Chongqing Bank has always maintained a high level, laying a solid foundation for the growth of net profit gap.
From the perspective of loan structure, the ratio of Chongqing Bank to corporate and retail loan is basically maintained at 2:1. Among public loans, the top proportions are leasing and business services, water conservancy, environmental and public facilities management and manufacturing, while real estate loans restricted by regulation account for less than 10%.
From the perspective of corporate loan companies, small and medium-sized enterprises are the focus of the bank's loan investment. In the first half of 2020, the scale of loans to small and medium-sized enterprises accounted for more than 75% of the total loan scale of the company. As a local urban commercial bank in Chongqing, Chongqing Bank has adhered to local positioning, continuously improved financial services for small and micro enterprises, and promoted economic quality, efficiency and upgrading.
In terms of retail loans, consumer loans and mortgage loans account for a high proportion, and the proportion of the two is similar, reflecting the stable style of Chongqing Bank in balancing profitability and stability.
It is reported that Chongqing Bank will increase credit investment in key projects such as strategic emerging industries, green economy, poverty alleviation, rural revitalization, the "Belt and Road" and the construction of the Chengdu-Chongqing Twin Cities Economic Circle in the future. As of the end of June 2020, the scale of Chongqing Bank's green credit and financial poverty alleviation were 12.152 billion yuan and 2.722 billion yuan respectively, accounting for 4.61% and 1.03% of the loans and advances issued by Chongqing Bank's .
latest data shows that Chongqing is expected to surpass Guangzhou to rank fourth in the GDP rankings of major cities and become the fourth city in China's economy. As Chongqing's economy further recovers, , Chongqing Bank , which resonates with Chongqing's economy and completes its A-share listing, may usher in the next highlight moment.
