Depth * Company * Ping An Bank (000001): The fundamental turning point can be expected to rely on the Group’s transformation

Relying on the Group’s resource advantages, Ping An Bank has performed well in the retail transformation. The revenue and pre-tax profit contribution from the retail sector has exceeded half.

At the same time, the company’s initial adjustments to corporate business were changed, the quality burden of existing assets was reduced, the fundamentals were significantly improved, and performance continued to improve.

In 2019, the company proposed the strategy of “doing fine work for the public”, and the synergy effect formed with the group’s comprehensive financial platform is worth looking forward to.

The company has completed the issuance of convertible bonds at the beginning of the year and is about to enter the conversion period in the second half of the year. At present, the company is gradually approaching the conversion price that triggered the compulsory redemption, which has formed a certain support for the estimate.

For the first coverage, we give a BUY rating.

  The main points of the support level are the turning point of performance, and convertible bonds supplement core capital.

With the continued strength of the retail business and the gradual adjustment of corporate business, the company’s fundamentals have improved and its performance has continued to improve.

In the first quarter of 2019, revenue and net profit increased by 16% and 13% respectively, achieving double-digit growth.

In the past, the company’s capital adequacy ratio was relatively low, restricting the speed of asset expansion.

In the first quarter, 26 billion convertible bonds were successfully issued. According to static calculations, after the convertible bonds are fully converted into shares, the core tier 1 capital replenishment rate can be supplemented by about an alternative, which can better support the development of the company’s business scale.

  Breakthrough in retail transformation, make the company stronger and better.

Since Ping An Bank determined the development strategy for retail transformation, relying on the Group’s resource advantages, extensive distribution network, comprehensive integrated financial product system and fintech 南京桑拿网 application, retail development momentum has grown rapidly.

The retail sector contributed more than half of the bank’s revenue and pre-tax profit in 2018 (53% and 69% in 2018).

In 2019, the company proposed the strategy of “doing fine work for the public” and used the Group’s comprehensive financial advantages to achieve breakthroughs. The performance of corporate deposits in the first quarter has improved and increased earlier.

9%.

  The quality of assets improved, and the burden of bad stocks improved.

In the past, Ping An Bank adjusted and optimized its corporate business with a relatively high proportion of non-performing assets, reduced the exposure balance of high-risk industries, and exited some high-default industries.

With the adjustment of the company’s business, the overall asset quality improved, and at the end of 2018/2019 at the end of the first quarter, it replaced 1 badly.

75% / 1.

73%, the company has poor indigestion scissors, loans / non-performing loans that are overdue for more than 90 days in the first quarter fell by 1 to 96% compared with 2018.

  We estimate that Ping An Bank’s EPS for 2019/2020 will be 1.

65/1.

88 yuan, corresponding to a net profit growth rate of 14.

1% / 14.

2%, currently corresponding to a net subsidy of 0 in 2019/2020.

97/0.

87x, corresponding to a P / E ratio of 8.

44/7.

40 times, the first coverage given a buy rating.

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