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Bank of Changsha Co., Ltd. (601577) Report Analysis

Fundamental Summary

Looking at Bank of Changsha's financials of Q1 reflected unimpressive, mediocre results. It is highly likely that it will be mostly tethered to market performance and sector movements for the near term. We therefore gave Bank of Changsha a total score of 72 out of 100 and a HOLD recommendation.

Bank of Changsha reported earnings results for the first quarter ended March 31, 2022. For the first quarter, the company reported net interest income was CNY 4,153.77 million compared to CNY 3,821.94 million a year ago. Net income was CNY 1,821.26 million compared to CNY 1,610.98 million a year ago. Basic earnings per share from continuing operations was CNY 0.45 compared to CNY 0.47 a year ago. Diluted earnings per share from continuing operations was CNY 0.45 compared to CNY 0.47 a year ago.

Business Description

Bank of Changsha provides various commercial banking products and services to personal and business customers in China. It accepts demand, time, notice, agreement, and structured deposits, as well as certificates of deposits, as well as provides investment products and credit cards. The company also offers working capital, fixed asset, merger and acquisition, and operating property loans; equity pledge financing; subsidy, stock option, investment, and inclusive loans, as well as e-loans; corporate finance; and investment banking services, including urban development and industry funds, structured financing, debt financing plan, non-financial corporate debt financing instruments, asset securitization, financing guarantee, syndicated loans, and merger and acquisition financing services. In addition, it provides settlement services, such as cash management, fund custody, corporate Internet banking, wage payment, bill and exchange, VAT electronic invoice, and corporate e-bank services, as well as integrated financial service platform. Further, the company offers trade finance services, such as export bills, package loans, stock financing, export credit insurance, forfaiting, export collection bills, inward and outward remittance financing, customs duty guarantees, open letters of credit, import bills, import bills collection, letters of guarantees, and payment services; buyer and seller financing; letters of credit issuance, letters of credit notice, letters of credit review/negotiation, import and export documentary collection, and foreign and forward exchange guarantees; and spot foreign exchange settlement and sale, and RMB foreign exchange swap. Bank of Changsha was founded in 1997 and is headquartered in Changsha, China.

Sector Overview

Bank of Changsha is included in the Banks according to GICS (global industry classification standard). The Banks industry, which is in the Financials sector, includes Diversified & Regional Banks whose operations focus on conventional banking, retail banking, and lending to SMEs (small and medium enterprises). Bank of Changsha's industry and sector affiliation are expected to negatively affect their likelihood to overperform the market in the upcoming period, as other sectors appear more likely to benefit from the macroeconomic environment we see now.

Fundamental Highlights


Parameter Value Change Score
Assets 826,535.2 5.1% 63
Liabilities 768,031.0 5.1% 74
Price to Book 0.6 -8.7% 79
Cash & Equivalents 25,914.4 1.7% 72
Equity 50,824.2 5.7% 69
Total Revenues 14,545.2 5.1% 57
Parameter Value Change Score
Return on Equity 12.2 -3.9% 58
Net Cashflow 8,680.2 63.1% 59
Capital Expenditure -202.8 -36.6% 45
Free Cashflow 2.1 -32.0% 81

* All values are TTM

The below chart reflects Bank of Changsha's birds-eye view on its performance with respect to its peers, the company's fillings as reported or to a similar industry, market cap, and country of origin. While Bank of Changsha's peer average final assessment score stands on 72.0, Bank of Changsha's score is 72.

  •  601577
  •  Peers average
Name Market Cap Balance Sheet Income Statement Cash Flow Rating Final Assessment mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 77 63 68
Hold
73
73 0 1
Industrial Bank Co., Ltd. 402.2B 85 67 66
Buy
80
80 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 72 61 68
Hold
68
68 2 1
China Everbright Bank Company Limited 160.4B 76 63 56
Hold
70
70 3 1
China Minsheng Banking Corp., Ltd. 150.8B 81 62 79
Hold
78
78 4 1
Bank of Nanjing Co., Ltd. 111.2B 82 66 54
Hold
74
74 5 1
Bank of Jiangsu Co., Ltd. 100.3B 83 71 84
Buy
86
86 6 1
Bank of Beijing Co., Ltd. 95.8B 84 59 75
Hold
77
77 7 1
Bank of Shanghai Co., Ltd. 92.8B 90 64 81
Buy
85
85 8 1
Bank of Hangzhou Co., Ltd. 85.0B 81 70 69
Buy
80
80 9 1
Hua Xia Bank Co., Limited 79.1B 81 63 75
Hold
77
77 10 1
Bank of Chengdu Co., Ltd. 61.3B 86 68 58
Buy
79
79 11 1
QILU BANK CO., LTD. 22.4B 93 69 80
Strong Buy
91
91 12 1
Bank of Guiyang Co.,Ltd. 21.2B 80 62 75
Hold
77
77 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 82 71 80
Buy
84
84 14 1
Bank of Xi'an Co.,Ltd. 16.2B 80 56 51
Hold
70
70 15 1
Xiamen Bank Co., Ltd. 15.6B 83 62 82
Buy
80
80 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 83 70 69
Buy
81
81 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 77 60 53
Hold
70
70 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 73 64 79
Hold
73
73 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 74 73 70
Hold
76
76 20 1
Ping An Bank Co., Ltd. 281.2B 83 72 85
Strong Buy
87
87 21 1
Bank of Ningbo Co., Ltd. 225.7B 89 70 71
Buy
86
86 22 1
Bank of Suzhou Co., Ltd. 22.1B 92 60 61
Buy
80
80 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 74 61 81
Hold
73
73 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 77 71 64
Hold
76
76 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 77 70 53
Hold
72
72 26 1

Technical Analysis

When trying to optimize the timing of an investment, it's critical to analyze whether the stock looks overbought or oversold, and in which direction the momentum is moving. Bank of Changsha's stock is now priced above its 5-day and 50-day, but below its 200-day moving average, while its MACD (moving average convergence divergence) indicates that the stock's price movement momentum is strengthening. Historically, this is a positive setup in both the short and medium-term. Meanwhile, looking at the Stochastic Oscillator and RSI (relative strength index), Bank of Changsha's stock indicates that it's likely oversold. Overall, these technical indicators signal positive upward momentum. Therefore, this stock received a cumulative TA (technical analysis) score of 73.

Bullish 73
Close Price 7.93
52W Low 7.08
52W High 9.3
5D MA 7.83
50D MA 7.64
200D MA 7.95
MACD 0.07
RSI 0.45
STOCH 64.0

Balance Sheet Analysis

Bank of Changsha appears likely to maintain its strong balance sheet metrics and momentum going forward. Bank of Changsha publishes impressive results related to book value factors in this report. Specifically, price to book ratio (P/B) now sits at 0.6 and represents a -8.7% change from the previous report. These book value factor numbers show that management has been prudent in focusing on efficient growth. We believe the stock price has room to grow to reflect its intrinsic value accurately. Consequently, their book value factors movement received a grade of 79. Also, Bank of Changsha is doing a good job of keeping its liabilities under control and growing intelligently. At filing, their liabilities were 768031.0, representing 5.1% change from the previous period. This performance is all interesting relative to their peers and suggests that their stock price has room to grow to reflect a higher intrinsic value. These results statistically lead to positive movement in stock prices, so we rated its liabilities movement component 74. On the other hand, Assets, jumped out as looking problematic. Bank of Changsha's management did not succeed in significantly improving the value of the assets on their balance sheet, which now sits at 826535.2 and represents a 5.1% change from the previous report. Bank of Changsha's unremarkable asset growth results, specifically compared to their industry peers' performance, should present negative pressure on Bank of Changsha's stock price. Consequently, their asset movement received a grade of 63. Therefore, we scored its balance sheet a 79.

Parameter Value Change Score
Assets 826,535.2 5.1% 63
Liabilities 768,031.0 5.1% 74
Price to Book 0.6 -8.7% 79
Cash & Equivalents 25,914.4 1.7% 72
Equity 50,824.2 5.7% 69
* All values are TTM

The below chart describes Bank of Changsha's performance as reflected on its balance sheet with respect to its peers. While Bank of Changsha received a balance sheet score of 79, the average of its peers stands on 74.0.

  •  601577
  •  Peers average
Name Market Cap Liabilities Movement Asset Change Equity/Intangibles Adjustments Cash & Equivalents Book Value Momentum Balance Sheet mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 72 81 68 37 84 77 0 1
Industrial Bank Co., Ltd. 402.2B 74 80 68 90 82 85 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 74 70 55 51 76 72 2 1
China Everbright Bank Company Limited 160.4B 89 44 69 54 76 76 3 1
China Minsheng Banking Corp., Ltd. 150.8B 80 45 69 90 77 81 4 1
Bank of Nanjing Co., Ltd. 111.2B 81 51 51 89 82 82 5 1
Bank of Jiangsu Co., Ltd. 100.3B 87 85 55 92 78 83 6 1
Bank of Beijing Co., Ltd. 95.8B 64 63 68 67 90 84 7 1
Bank of Shanghai Co., Ltd. 92.8B 83 62 54 90 90 90 8 1
Bank of Hangzhou Co., Ltd. 85.0B 82 63 54 87 79 81 9 1
Hua Xia Bank Co., Limited 79.1B 79 49 69 89 76 81 10 1
Bank of Chengdu Co., Ltd. 61.3B 83 76 68 82 83 86 11 1
QILU BANK CO., LTD. 22.4B 80 59 95 77 89 93 12 1
Bank of Guiyang Co.,Ltd. 21.2B 74 61 69 77 80 80 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 85 81 69 60 81 82 14 1
Bank of Xi'an Co.,Ltd. 16.2B 81 55 67 97 75 80 15 1
Xiamen Bank Co., Ltd. 15.6B 86 66 69 84 78 83 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 83 72 69 81 79 83 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 41 80 56 95 80 77 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 66 72 55 62 78 73 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 78 77 55 60 75 74 20 1
Ping An Bank Co., Ltd. 281.2B 79 78 69 88 79 83 21 1
Bank of Ningbo Co., Ltd. 225.7B 86 51 68 97 84 89 22 1
Bank of Suzhou Co., Ltd. 22.1B 91 82 54 97 89 92 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 66 68 55 72 77 74 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 84 53 55 65 79 77 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 76 66 69 76 74 77 26 1

Income Statement Analysis

Bank of Changsha appears likely to maintain its strong income statement metrics, especially Return Factors. In this filing, Bank of Changsha reported a return on equity (ROE) ratio of 12.2, which represents a change of -3.9%. The company appears headed in the right direction in terms of these return factors, exhibiting prudent capital expenditure growth compared to its peers. Consequently, their return factors received a grade of 58. That said, one metric, Revenue Efficiency, stood out as strongly negative. Bank of Changsha reported discouraging numbers for its revenue efficiency. As of the current filing, they were reported as 14545.2 and represented 5.1% change from the previous period. This metric might have a 2.3 percent impact on companies in the same industry and with the same market capitalization. Their revenue efficiency, specifically in contrast to their industry peers', isn't encouraging. As a result, their revenue efficiency earned a score of 57. their income statement received an overall score of 62.

Parameter Value Change Score
Total Revenues 14,545.2 5.1% 57
Return on Equity 12.2 -3.9% 58
* All values are TTM

The below chart describes Bank of Changsha's performance as reflected on its income statement with respect to its peers. While Bank of Changsha received a income statement score of 62 , the average of its peers stands on 65.0.

  •  601577
  •  Peers average
Name Market Cap Revenue Momentum Earning Movement Return Factors Momentum Income Statement mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 58 68 61 63 0 1
Industrial Bank Co., Ltd. 402.2B 48 67 73 67 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 80 67 54 61 2 1
China Everbright Bank Company Limited 160.4B 69 67 61 63 3 1
China Minsheng Banking Corp., Ltd. 150.8B 85 67 55 62 4 1
Bank of Nanjing Co., Ltd. 111.2B 48 65 74 66 5 1
Bank of Jiangsu Co., Ltd. 100.3B 48 69 80 71 6 1
Bank of Beijing Co., Ltd. 95.8B 63 68 50 59 7 1
Bank of Shanghai Co., Ltd. 92.8B 66 67 61 64 8 1
Bank of Hangzhou Co., Ltd. 85.0B 48 66 82 70 9 1
Hua Xia Bank Co., Limited 79.1B 61 67 61 63 10 1
Bank of Chengdu Co., Ltd. 61.3B 44 68 75 68 11 1
QILU BANK CO., LTD. 22.4B 50 68 76 69 12 1
Bank of Guiyang Co.,Ltd. 21.2B 69 67 58 62 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 52 71 77 71 14 1
Bank of Xi'an Co.,Ltd. 16.2B 47 64 58 56 15 1
Xiamen Bank Co., Ltd. 15.6B 48 68 59 62 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 66 68 76 70 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 81 71 55 60 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 54 69 61 64 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 84 69 77 73 20 1
Ping An Bank Co., Ltd. 281.2B 53 68 81 72 21 1
Bank of Ningbo Co., Ltd. 225.7B 55 68 76 70 22 1
Bank of Suzhou Co., Ltd. 22.1B 53 66 58 60 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 62 67 57 61 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 64 67 79 71 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 51 68 77 70 26 1

Cash Flow Analysis

Free Cash flow and Net Cash Flow stand out as the most significant drivers of Bank of Changsha's cash flow's strength. Bank of Changsha did a great job related to free cash flow this period, which stood at 2.1, representing a -32.0% change from the previous filing. Companies in the same industry and market capitalization are typically affected by this parameter by up to 9.3%. These free cash flow numbers show that management has executed well while generating cash flow and encouraging growth. Consequently, their free cash flow movement received a grade of 81. Also, Bank of Changsha's management was effective in improving their net cash flow, which now sits at 8680.2 and represents a 63.1% change from the previous report. This industry-leading net cash flow momentum should reinforce broader positive momentum for its's stock price going forward. Hence, its net cash flow earned a score of 59. That said, one metric, Capital Expenditure, stood out as particularly concerning. Bank of Changsha's management was ineffective in materially improving CapEx, which now sits at -202.8 and represents a -36.6% change from the previous report. This performance is all the more uninspiring relative to their peers and competitors. Therefore, their CapEx movement component earned a score of 45. Therefore, we scored its cash flow a 60.

Parameter Value Change Score
Net Cashflow 8,680.2 63.1% 59
Capital Expenditure -202.8 -36.6% 45
Free Cashflow 2.1 -32.0% 81
* All values are TTM

The below chart describes Bank of Changsha's performance as reflected on its cash flow with respect to its peers. While Bank of Changsha received a cash flow score of 60, the average of its peers stands on 68.0.

  •  601577
  •  Peers average
Name Market Cap Cashflow Momentum Free Cashflow Growth Capital Expenditure Growth Assets Factors Momentum Cash Flow mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 90 45 44 69 68 0 1
Industrial Bank Co., Ltd. 402.2B 81 56 47 69 66 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 48 87 85 69 68 2 1
China Everbright Bank Company Limited 160.4B 43 95 54 69 56 3 1
China Minsheng Banking Corp., Ltd. 150.8B 84 45 91 69 79 4 1
Bank of Nanjing Co., Ltd. 111.2B 49 84 48 69 54 5 1
Bank of Jiangsu Co., Ltd. 100.3B 93 41 90 69 84 6 1
Bank of Beijing Co., Ltd. 95.8B 67 67 92 69 75 7 1
Bank of Shanghai Co., Ltd. 92.8B 95 38 80 69 81 8 1
Bank of Hangzhou Co., Ltd. 85.0B 49 87 90 69 69 9 1
Hua Xia Bank Co., Limited 79.1B 80 57 69 69 75 10 1
Bank of Chengdu Co., Ltd. 61.3B 66 67 45 69 58 11 1
QILU BANK CO., LTD. 22.4B 81 54 90 69 80 12 1
Bank of Guiyang Co.,Ltd. 21.2B 67 67 90 69 75 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 71 73 81 69 80 14 1
Bank of Xi'an Co.,Ltd. 16.2B 43 90 62 67 51 15 1
Xiamen Bank Co., Ltd. 15.6B 93 40 85 69 82 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 96 37 44 69 69 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 46 99 50 67 53 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 82 52 84 69 79 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 85 50 56 69 70 20 1
Ping An Bank Co., Ltd. 281.2B 91 42 96 69 85 21 1
Bank of Ningbo Co., Ltd. 225.7B 93 38 59 69 71 22 1
Bank of Suzhou Co., Ltd. 22.1B 61 78 49 69 61 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 86 49 84 69 81 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 39 98 84 69 64 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 42 94 51 69 53 26 1

This report is intended for general guidance and information purposes only and under no circumstances is tailored to a specific factor or variable related to its reader or intended to be used or considered as financial or investment advice, a solicitation of any offer, a recommendation, or an offer to sell or buy any securities or other form of a financial asset. For the full disclaimer, click here.