Bank of Jiangsu Co., Ltd. (600919) Report Analysis
At a high level, the metrics from Bank of Jiangsu's Q1 financial report release were demonstrably positive. Specifically, their growth, value, and income factors indicate a well-planned and balanced effort, which is generating exciting growth. These results lead us to believe that there should be significant upside potential for the stock. As such, Bank of Jiangsu received an overall score of 86 and a BUY recommendation.
Bank of Jiangsu reported earnings results for the first quarter ended March 31, 2022. For the first quarter, the company reported net interest income was CNY 12,429.52 million compared to CNY 10,936.78 million a year ago. Net income was CNY 6,584.15 million compared to CNY 5,225.41 million a year ago. Basic earnings per share from continuing operations was CNY 0.39 compared to CNY 0.3 a year ago. Diluted earnings per share from continuing operations was CNY 0.37 compared to CNY 0.26 a year ago.
Business Description
Bank of Jiangsu provides various banking products and services in China. It operates through: Corporate Banking, Retail Banking, and Treasury Business segments. The company’s personal banking services include private banking; investment and financing; personal savings; investment and wealth management; personal exchange; personal loans; payment, and welfare and sport lottery agency; and consumer finance services. It also offers corporate banking services consisting of time, call, and current deposits; project financing and wealth management services; inward and outward remittance, export documentary collection and credit, import payment agency, and package loans, as well as L/C advice, review and negotiation, xonfirmation, and establishment services; money market, fixed income, and foreign exchange and derivatives; investment banking services, such as M&A and reorganization, structured financing, bond market, and securitization; and custody services. In addition, the company provides corporate loan, trade financing, finance leasing, guarantee, remittance and settlement, securities agency, credit card, repurchase transaction, and derivatives trading services; debt instrument investment services; foreign currency; and Internet banking services, such as direct, mobile, personal online, corporate online, telephone, SMS, and WeChat banking. It operates through 533 branches, including a head office, 17 branches, 1 franchised institution, and 514 sub-branches. Bank of Jiangsu serves individuals, corporations, government agencies, and financial institutions. The company was founded in 2007 and is headquartered in Nanjing, China.
Sector Overview
Bank of Jiangsu 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 Jiangsu'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.
Parameter | Value | Change | Score | |
---|---|---|---|---|
Return on Equity | 11.2 | 3.9% | 80 | |
Net Cashflow | 55,290.2 | 154.0% | 93 | |
Capital Expenditure | -2,300.8 | 17.0% | 90 | |
Free Cashflow | 9.2 | 99.0% | 41 |
* All values are TTM
The below chart reflects Bank of Jiangsu'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 Jiangsu's peer average final assessment score stands on 67.0, Bank of Jiangsu's score is 86.
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 Jiangsu's stock is now priced above its 5-day, 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, medium, and long-term. In particular, many institutional investors keep close watch of the 200-day moving average. Meanwhile, looking at the Stochastic Oscillator and RSI (relative strength index), Bank of Jiangsu's stock indicates that it's likely oversold. Overall, these technical indicators don't clearly signal directional momentum. Therefore, this stock received a cumulative TA (technical analysis) score of 68.
Cash & Equivalents and Liabilities stood out as the most significant drivers of Bank of Jiangsu's balance sheet strength. Bank of Jiangsu's management was effective in improving its cash and cash equivalents metrics, which now sit at 143109.9. This represents 73.9% change from the last reporting period. This impressive growth, specifically in contrast to their industry peers' performance, should support an upswing in the company's stock price. Consequently, their cash and cash equivalents movement received a grade of 92. Also, Bank of Jiangsu has done an excellent job managing its liabilities. Bank of Jiangsu's liabilities stood at 2560868.4 in the current filing, which represents a 5.8% change from the previous report. These liabilities changes appear balanced compared to their peers and project the message that management is capable and focused on balancing asset growth, resource allocation, and growing liabilities. The company's liabilities movement component, therefore, received a grade of 87. However, one concerning metric, Equity, stood out. Bank of Jiangsu management produced disappointing equity metrics this period, which stood at 177973.0, representing a 3.3% change. This parameter often affects companies in the same industry and market capitalization by up to 7.1%. Their equity metrics appear unremarkable relative to their peers. Therefore, their equity movement component earned a score of 55. Therefore, it received a score of 83.
Parameter | Value | Change | Score |
---|---|---|---|
Assets | 2,764,874.2 | 5.6% | 85 |
Liabilities | 2,560,868.4 | 5.8% | 87 |
Price to Book | 0.6 | 21.7% | 78 |
Cash & Equivalents | 143,109.9 | 73.9% | 92 |
Equity | 177,973.0 | 3.3% | 55 |
The below chart describes Bank of Jiangsu's performance as reflected on its balance sheet with respect to its peers. While Bank of Jiangsu received a balance sheet score of 83, the average of its peers stands on 70.0.
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 Beijing Co., Ltd. | 95.8B | 64 | 63 | 68 | 67 | 90 | 84 | 6 | 1 |
Bank of Shanghai Co., Ltd. | 92.8B | 83 | 62 | 54 | 90 | 90 | 90 | 7 | 1 |
Bank of Hangzhou Co., Ltd. | 85.0B | 82 | 63 | 54 | 87 | 79 | 81 | 8 | 1 |
Hua Xia Bank Co., Limited | 79.1B | 79 | 49 | 69 | 89 | 76 | 81 | 9 | 1 |
Bank of Chengdu Co., Ltd. | 61.3B | 83 | 76 | 68 | 82 | 83 | 86 | 10 | 1 |
Bank of Changsha Co., Ltd. | 31.4B | 74 | 63 | 69 | 72 | 79 | 79 | 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 |
Bank of Jiangsu appears likely to maintain its strong income statement metrics, especially Return Factors. Bank of Jiangsu's reported return on equity (ROE) ratio was 11.2, representing a change of 3.9%. These numbers show that management has successfully encouraged growth while managing ROE and ROA metrics, especially relative to their peers. The company's return factors (ROA & ROE) components, therefore, received a grade of 80. That said, one metric, Revenue Efficiency, stood out as strongly negative. Bank of Jiangsu management did an underwhelming job managing revenue efficiency this past period. Bank of Jiangsu's revenue efficiency is 43313.7 according to the metrics in the current filing, which represents a 5.2% 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. Its uninspiring revenue efficiency is even more concerning relative to its peers and competitors in the current market. Consequently, their revenue efficiency received a grade of 48. their income statement received an overall score of 71.
Parameter | Value | Change | Score |
---|---|---|---|
Total Revenues | 43,313.7 | 5.2% | 48 |
Return on Equity | 11.2 | 3.9% | 80 |
The below chart describes Bank of Jiangsu's performance as reflected on its income statement with respect to its peers. While Bank of Jiangsu received a income statement score of 71 , the average of its peers stands on 63.0.
Bank of Jiangsu appears likely to maintain its strong cash flow metrics and momentum going forward. Bank of Jiangsu's strong net cash flow numbers, which were 55290.2 in this filing, showed a 154.0% change from the last period. This industry-leading net cash flow momentum should reinforce broader positive momentum for its's stock price going forward. The company's net cash flow, therefore, received a grade of 93. Also, Bank of Jiangsu's published capital expenditures (CapEx) numbers were encouraging and reflected management's balanced change strategy. Bank of Jiangsu recorded CapEx of -2300.8, which represents 17.0% change from the previous report. The company appears to be headed in the right direction regarding resource allocation, exhibiting prudent capital expenditure growth compared to its peers. Therefore, its CapEx movement component earned a score of 90. However, one discouraging result, Free Cash flow, stood out. Bank of Jiangsu's published free cash flow numbers were subpar and could mean that management has lost focus on achieving healthy growth. Bank of Jiangsu recorded free cash flow of 9.2, which represents 99.0% growth from the previous report. 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 41. Consequently, its cash flow earned a score of 84.
Parameter | Value | Change | Score |
---|---|---|---|
Net Cashflow | 55,290.2 | 154.0% | 93 |
Capital Expenditure | -2,300.8 | 17.0% | 90 |
Free Cashflow | 9.2 | 99.0% | 41 |
The below chart describes Bank of Jiangsu's performance as reflected on its cash flow with respect to its peers. While Bank of Jiangsu received a cash flow score of 84, the average of its peers stands on 67.0.
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.