Chasing rabbit: When will Citic Bank return to the forefront of outstanding listed banks?

2022-05-16 0 By

On March 25, the banking sector closed with 19 banks up, 17 banks down and 6 banks flat, ranking 25th out of 76 industry groups.Internet e-commerce, planting and forestry, and textile manufacturing led gains, while medical services, pharmaceutical commerce, and medical devices led declines.Shanghai fell 1.17%, Shenzhen 1.89% and chinext 2.52%.Banking shares fell 0.02% to close at 904.65.Bank plate performance today in the medium, intraday once rushed to 912.38 points, then began to fall, has been in the horizontal line up and down the shock, after much short anxiety, the final bear with a slight advantage to end the whole day.Although the final close down, but from the ranking point of view, from the market trend, the bank plate performance is not bad.From this week’s market, the bank plate gradually established a bottom platform.This week has 5 days, up one day, down four days, a total decline of 0.32%.From the weekly line, the banking sector has fallen for three consecutive weeks, but the decline is shrinking.With such potential energy to go down, the future of the banking plate down space is very limited.The Shanghai Composite index rose for three days and fell for two, down 1.19% for the week.The Shenzhen Composite index rose for two days, fell for three, and lost 2.08% for the week.Growth Enterprise index rose two days, fell three days, this week’s total loss of 2.79%.The banking sector and the three major indexes showed a downward trend, but the banking sector performed relatively well, the decline was much less than the three major indexes.Today, two banks released 2021 annual reports, namely Industrial Bank and Citic Bank.Both banks ended higher, helped by positive results in their annual reports.China Citic Bank took the lead in the banking sector.The day before yesterday we briefly analyzed Industrial Bank, today let’s talk about Citic Bank.I’m going to look at the bank from three angles to see if it’s your cup of tea.The 2021 annual report of China Citic Bank should be viewed from two perspectives: horizontal and vertical.Horizontally, there is still a certain gap between Citic Bank and outstanding listed banks.Vertically, Citic Bank has made great progress compared with the past.1. From a horizontal perspective, the net profit of CITIC Bank was 55.641 billion yuan, up 13.6% year on year, which is much lower than the growth rate of the three joint-stock banks that have published annual reports. Ping An Bank is 25.61%, China Merchants Bank is 23.2%, and Industrial Bank is 24.1%.The non-performing loan ratio of Citic Bank is 1.39%, which is still far behind the three joint-stock banks that have published annual reports.Ping An Bank is 1.02%, China Merchants Bank 0.91% and Industrial Bank 1.1%.Why citic bank’s share price is less than 5 yuan, why citic Bank’s price-earnings ratio is only 4.01?Maybe that’s why.2. From a vertical perspective, the net profit growth rate of Citic Bank is 13.6%, which seems not high, but it is the highest in the past eight years.The defect rate of 1.39% May not seem low, but it is 25bp lower than last year.This decline is very large, at least than China Merchants Bank, Ping an Bank and Industrial Bank decline.”We will soon return to the top of the competition among joint-stock banks,” Fang Heying, citic Bank’s president, said at the results conference.In fact, citic Bank’s annual performance is also commendable, like a rabbit to catch up.Founded on April 14, 1987, CITIC Bank is the second joint-stock commercial bank in China, only 6 days later than the first joint-stock bank, China Merchants Bank.In 2000, China Citic Bank developed rapidly and took the leading position in the domestic banking industry.China Citic Bank was the first domestic financial institution to underwrite foreign bonds and the first to offer private banking services.In 2003, The Banker magazine ranked Citic Bank’s average profit margin on capital as the highest among Chinese banks.I do not know when citic Bank’s non-performing assets began to increase, the speed of development has gradually opened to the slow lane, citic Bank in the first echelon of listed banks disappeared.As a banker, I can also feel the loneliness of Citic Bank through daily chatting.In the past, employees like to work in CITIC, and most of the employees in Citic can be promoted.Most of the current staff job-hopping is to ping An, Industrial and other joint-stock banks.Citic Bank has so many employees, there is a certain reason.From the perspective of the price trend of Citic Bank, the share price of Citic Bank is always below 5 yuan, and in a very few trading days, the share price of Citic Bank will stand above 5 yuan.Trading days above 6 yuan are even rarer, with the last trading day above 6 yuan going back to November 5, 2019.Citic Bank to return to 6 yuan, 7 yuan, seems to be not easy to achieve.Citic bank’s price/earnings ratio is 4.01, compared with 4.56 yuan today. If it had the same price/earnings ratio as Industrial Bank, it would be 5.73 yuan.If it had the same p/E as Ping An bank, the shares would be worth only 9.09 yuan.If the same as China Merchants Bank, citic Bank shares are only 10.8 yuan.From this perspective, it seems unrealistic to expect higher returns from Citic Bank’s share price.From the dividend dividend, Citic Bank’s annual report announced the dividend plan is 10 shares of 3.02 yuan.If the plan is approved by the board, the dividend yield for 2021 is 6.54 per cent, or 6.62 per cent if you buy citic today, excluding dividend tax.From this point of view, investment in Citic Bank is still worth a certain amount, at least the dividend is quite considerable.Conclusion: The 2021 annual report of China Citic Bank is good, but it is obviously impossible to soar after years of weakness.But in comparison to itself, its performance in 2021 is still pretty good and improved.For investors, its share price rise advantage is not big, but the dividend yield is very substantial, better than bank financial products is not a problem.I am a bank research monk, pay attention to me, let’s study and discuss together, if you think WHAT I said is helpful to you, sincerely hope you open the three points on the top right of the screen, give me a reward!Your support is my motivation to renew.