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Wuxi Rural Commercial Bank Co.,Ltd (600908) Report Analysis

Corporate Events

Positive

Wuxi Rural Commercial Bank Co.,Ltd announced th...

2021-10-28 00:00:00

Wuxi Rural Commercial Bank Co.,Ltd announced a private placement of not more than 3,200,500,000 A shares for gross proceeds of not more than C...

Positive

Wuxi Rural Commercial Bank Co.,Ltd announced that it expects to receive CNY 2 billion in funding

2021-10-28 00:00:00

Wuxi Rural Commercial Bank Co.,Ltd announced a private placement of not more than 3,200,500,000 A shares for gross proceeds of not more than CNY 2,000,000,000 on October 28, 2021. The transaction include participation from no more than 35 specific investors. The transaction was approved by the board of directors in its third meeting of the sixth board of directors of the company. The transaction is subjected to approval of second extraordinary general meeting of shareholders in 2021, Jiangsu Banking and Insurance Regulatory Bureau approval, China Securities Regulatory Commission approval and other regulatory agencies approvals . The issuance price of this issuance shall not be less than 80% of the average transaction price of the company’s A shares 20 trading days before the pricing base date. The securities issued are subjected to six months hold period from the date of issuance.

Fundamental Summary

Wuxi Rural Commercial's financial results from Q1 demonstrated decent performance, but will likely only help Wuxi Rural Commercial remain on par with its peers. We do believe, though, that macro-related market conditions will influence Wuxi Rural Commercial's performance more significantly than its individual results. Overall, Wuxi Rural Commercial's income and value factors are trending positively, and we, therefore, give Wuxi Rural Commercial an overall grade of 73 and a HOLD recommendation.

Wuxi Rural Commercial reported earnings results for the first quarter ended March 31, 2022. For the first quarter, the company reported net interest income was CNY 888.85 million compared to CNY 843.14 million a year ago. Net income was CNY 444.39 million compared to CNY 362.71 million a year ago. Basic earnings per share from continuing operations was CNY 0.24 compared to CNY 0.2 a year ago. Diluted earnings per share from continuing operations was CNY 0.2 compared to CNY 0.16 a year ago.

Business Description

Wuxi Rural Commercial provides various personal and corporate banking products and services. The company offers financial management, funds, insurance, account management, microfinance, forex trading, foreign currency exchange, trade settlement and finance business, remittance and letter of credit, and card and online banking services. It operates 1 sales department, 55 sub-branches, and 57 branch offices. Wuxi Rural Commercial was founded in 2005 and is headquartered in Wuxi, China.

Sector Overview

Wuxi Rural Commercial 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). Wuxi Rural Commercial'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 208,083.7 2.3% 72
Liabilities 191,715.5 2.1% 66
Price to Book 0.6 -9.4% 78
Cash & Equivalents 8,134.7 -15.1% 62
Equity 16,236.6 5.2% 55
Total Revenues 3,104.2 6.5% 54
Parameter Value Change Score
Return on Equity 11.0 -1.5% 61
Net Cashflow 4,143.2 -44.2% 82
Capital Expenditure -188.9 11.9% 84
Free Cashflow 4.2 51.4% 52

* All values are TTM

The below chart reflects Wuxi Rural Commercial'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 Wuxi Rural Commercial's peer average final assessment score stands on 71.0, Wuxi Rural Commercial's score is 73.

  •  600908
  •  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
Bank of Changsha Co., Ltd. 31.4B 79 62 60
Hold
72
72 12 1
QILU BANK CO., LTD. 22.4B 93 69 80
Strong Buy
91
91 13 1
Bank of Guiyang Co.,Ltd. 21.2B 80 62 75
Hold
77
77 14 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 82 71 80
Buy
84
84 15 1
Bank of Xi'an Co.,Ltd. 16.2B 80 56 51
Hold
70
70 16 1
Xiamen Bank Co., Ltd. 15.6B 83 62 82
Buy
80
80 17 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 83 70 69
Buy
81
81 18 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 77 60 53
Hold
70
70 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. Wuxi Rural Commercial's stock is now priced above its 5-day, but below its 50-day and 200-day moving average, while its MACD (moving average convergence divergence) indicates that the stock's price movement momentum is weakening. Historically, this is a positive setup in the near-term. Meanwhile, looking at the Stochastic Oscillator and RSI (relative strength index), Wuxi Rural Commercial's stock indicates that it's likely oversold. Overall, these technical indicators signal negative momentum. Therefore, this stock received a cumulative TA (technical analysis) score of 52.

Bearish 52
Close Price 5.6
52W Low 5.32
52W High 6.42
5D MA 5.55
50D MA 5.63
200D MA 5.8
MACD -0.01
RSI 0.61
STOCH 42.31

Balance Sheet Analysis

Two metrics jump up as the most significant positive drivers of the balance sheet strength in Wuxi Rural Commercials recent report: Book Value Factors and Assets. Wuxi Rural Commercial's price to book ratio (P/B) was reported as 0.6 and represents -9.4% 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. The company's book value factors component, therefore, received a grade of 78. Also, Wuxi Rural Commercial assets on their balance sheet, moved to 208083.7, which is a 2.3% change from the last period. This performance is interesting in comparison to its peers and competitors. Consequently, their asset movement received a grade of 72. That said, one metric, Equity, stood out as strongly negative. Wuxi Rural Commercial published concerning equity metrics for this filing. In the current report, equity stood at 16236.6, which represents a 5.2% change from the last report. This parameter often affects companies in the same industry and market capitalization by up to 7.1%. This performance is significantly less impressive than its peers and competitors. Consequently, their equity movement received a grade of 55. Therefore, the company's balance sheet earned a grade of 73.

Parameter Value Change Score
Assets 208,083.7 2.3% 72
Liabilities 191,715.5 2.1% 66
Price to Book 0.6 -9.4% 78
Cash & Equivalents 8,134.7 -15.1% 62
Equity 16,236.6 5.2% 55
* All values are TTM

The below chart describes Wuxi Rural Commercial's performance as reflected on its balance sheet with respect to its peers. While Wuxi Rural Commercial received a balance sheet score of 73, the average of its peers stands on 73.0.

  •  600908
  •  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
Bank of Changsha Co., Ltd. 31.4B 74 63 69 72 79 79 12 1
QILU BANK CO., LTD. 22.4B 80 59 95 77 89 93 13 1
Bank of Guiyang Co.,Ltd. 21.2B 74 61 69 77 80 80 14 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 85 81 69 60 81 82 15 1
Bank of Xi'an Co.,Ltd. 16.2B 81 55 67 97 75 80 16 1
Xiamen Bank Co., Ltd. 15.6B 86 66 69 84 78 83 17 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 83 72 69 81 79 83 18 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 41 80 56 95 80 77 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

Wuxi Rural Commercial appears likely to maintain its strong income statement metrics, especially Return Factors. Return factors metrics and ratios were exceptional in this report. Wuxi Rural Commercial reported a return on equity (ROE) ratio of 11.0, representing a change of -1.5% from the last report. These numbers show that management has successfully encouraged growth while managing ROE and ROA metrics, especially relative to their peers. Therefore, its return factors component earned a score of 61. That said, one metric, Revenue Efficiency, stood out as strongly negative. Wuxi Rural Commercial management did an underwhelming job managing revenue efficiency this past period. Wuxi Rural Commercial's revenue efficiency is 3104.2 according to the metrics in the current filing, which represents a 6.5% change from the previous report. 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 54. their income statement received an overall score of 64.

Parameter Value Change Score
Total Revenues 3,104.2 6.5% 54
Return on Equity 11.0 -1.5% 61
* All values are TTM

The below chart describes Wuxi Rural Commercial's performance as reflected on its income statement with respect to its peers. While Wuxi Rural Commercial received a income statement score of 64 , the average of its peers stands on 68.0.

  •  600908
  •  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
Bank of Changsha Co., Ltd. 31.4B 57 68 58 62 12 1
QILU BANK CO., LTD. 22.4B 50 68 76 69 13 1
Bank of Guiyang Co.,Ltd. 21.2B 69 67 58 62 14 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 52 71 77 71 15 1
Bank of Xi'an Co.,Ltd. 16.2B 47 64 58 56 16 1
Xiamen Bank Co., Ltd. 15.6B 48 68 59 62 17 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 66 68 76 70 18 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 81 71 55 60 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

Capex and Net Cash Flow stand out as the most significant drivers of Wuxi Rural Commercial's cash flow's strength. Wuxi Rural Commercial's management was effective in improving its CapEx, which now sits at -188.9 and represents 11.9% change from the previous report. This performance is all the more impressive relative to their peers and competitors. Therefore, its CapEx movement component earned a score of 84. Also, Wuxi Rural Commercial's management was effective in improving their net cash flow, which now sits at 4143.2 and represents a -44.2% change from the previous report. The company is headed in the right direction regarding business priorities, exhibiting prudent net cash flow management and growth. The company's net cash flow, therefore, received a grade of 82. However, one discouraging result, Free Cash flow, stood out. Wuxi Rural Commercial did a poor job related to generating and maintaining strong free cash flow this period, which stood at 4.2, representing a 51.4% change from the previous filing. Companies in the same industry and market capitalization are typically affected by this parameter by up to 9.3%. their free cash flow situation appears to be much weaker than their peers. Management needs to do a better job balancing cash flow, asset growth, and resources allocations in general. Its free cash flow movement, therefore, received a grade of 52. The company's cash flow received an overall score of 79.

Parameter Value Change Score
Net Cashflow 4,143.2 -44.2% 82
Capital Expenditure -188.9 11.9% 84
Free Cashflow 4.2 51.4% 52
* All values are TTM

The below chart describes Wuxi Rural Commercial's performance as reflected on its cash flow with respect to its peers. While Wuxi Rural Commercial received a cash flow score of 79, the average of its peers stands on 67.0.

  •  600908
  •  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
Bank of Changsha Co., Ltd. 31.4B 59 81 45 69 60 12 1
QILU BANK CO., LTD. 22.4B 81 54 90 69 80 13 1
Bank of Guiyang Co.,Ltd. 21.2B 67 67 90 69 75 14 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 71 73 81 69 80 15 1
Bank of Xi'an Co.,Ltd. 16.2B 43 90 62 67 51 16 1
Xiamen Bank Co., Ltd. 15.6B 93 40 85 69 82 17 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 96 37 44 69 69 18 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 46 99 50 67 53 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.