Minsheng Bank (600016): The first single perpetual bond of the stock bank will be issued

Recent situation of the company 天津夜网 Last night, Minsheng Bank issued an announcement that the issuance of non-fixed-term capital bonds of no more than $ 40 billion has been approved by the People’s Bank of China. As of May 9, the announcement has been approved by the CBRC.

We comment below.

Comments As other Tier 1 capital instruments, the issuance of perpetual bonds helps to enhance the capital strength of commercial banks.

As of 1Q19, the core capital adequacy ratio / tier one capital adequacy ratio / capital adequacy ratio of commercial banks was 10 respectively.

95/11.

52/14.

18%, a decrease of 8/6 / 2bp from the previous quarter.

As of the first quarter of 19, Minsheng Bank’s Tier 1 capital adequacy ratio was 9.

28%, ranking the bottom of the comparable industry, and the successful issue of perpetual bonds has helped to improve Minsheng Bank’s Tier 1 capital adequacy ratio.

84ppts to 10.

12%, better support future business development.

Supervision and guidance support Chinese banks to supplement capital through multiple channels.

At the end of January, the long-term announcement of the creation of a note swap instrument CBS to provide liquidity support for banks to issue perpetual bonds. At the same time, the CBRC decided to lift restrictions and allow insurance institutions to invest in non-fixed-term capital bonds issued by commercial banks.

Bank of China successfully issued the first single perpetual bond, and Minsheng Bank is expected to become the first commercial bank in a stock bank to complete the issuance of perpetual bonds.

In the second quarter of 19, the trend of high revenue tended to continue, and continued to increase the efforts to identify and dispose of bad.

In the first quarter of 19, Minsheng Bank’s PPOP increased by more than 25.

0% (Net profit increased by 5 per year during the same period.

7%, lower than the PPOP growth rate of 19.

3ppts), a significant increase in growth rate earlier than 4Q18, mainly due to the NIM and scale growth base effect since last year and the income contribution to resume growth.

Looking forward, we believe that the 天津夜网 above factors still exist, supporting the company to record higher revenue growth, and 1Q19 provisions for longer growth.

5%, 4Q18 After eliminating the bad scissors difference, continue to increase provisions to consolidate the quality of assets.

It is estimated that the company is currently trading at 0.

60/0.

49x A / H 2019e P / B.

We maintain the stock’s neutral rating and target price of RMB.

29 yuan is unchanged, corresponding to 0.

71x 2019e P / B and 19.

9% growth potential; Maintain H-share recommended rating and target price of HK $ 6.

94 is unchanged, corresponding to 0.

60x 2019eP / B and 23.

0% upside.

The quality performance of risk assets was lower than expected.