NJBK(SH:601009) HTSC·2025-06-10 01:37Investment Rating - The report maintains a "Buy" rating for the company with a target price of 13.29 RMB [8][11]. Core Views - The company has triggered the conditional redemption clause for its convertible bonds, which is expected to strengthen its capital base and support further business expansion [2][4]. - The company is rooted in a high-quality region in Jiangsu, showing steady profit growth and maintaining a high dividend payout ratio, making it a potential growth and dividend stock [1][3]. - The stock has underperformed compared to peers since the beginning of the year, indicating potential for valuation recovery [1][3]. Summary by Sections Convertible Bonds and Capital Strengthening - The company announced that from May 13, 2025, to June 9, 2025, it had 15 trading days where the closing price was at least 130% of the current conversion price of the convertible bonds, triggering the redemption clause [2]. - As of the end of Q1 2025, the unconverted balance of the convertible bonds was 10.5 billion RMB, and the completion of the conversion is expected to increase the core capital adequacy ratio by 0.57 percentage points to 9.46% [2]. Earnings and Dividend Growth - As of June 9, 2025, the unconverted balance of the convertible bonds was approximately 5.2 billion RMB, accounting for about 4% of the company's total market value [3]. - The dilution effect on earnings per share (EPS) for 2025 is estimated to be around 10%, but the impact on dividend yield and return on equity (ROE) is manageable [3]. - The company is expected to maintain strong profitability and dividend metrics, with a projected dividend yield of 5.21% and a price-to-book (PB) ratio of 0.78x for 2025 [3]. Performance and Shareholder Confidence - The company has a clear strategic goal and has shown steady growth in performance, with revenue and net profit increasing by 6.5% and 7.1% year-on-year in Q1 2025, respectively [4]. - Major shareholders have increased their holdings significantly, with over 7 billion RMB in purchases, reflecting strong confidence in the company's future [4]. Profit Forecast and Valuation - The profit forecast remains unchanged, with EPS projected at 1.86, 2.02, and 2.23 RMB for 2025-2027, respectively [5]. - The target PB ratio has been adjusted to 0.90x, with a target price of 13.29 RMB, indicating a favorable valuation compared to peers [5].