NJBK(SH:601009) HTSC·2025-06-10 02:50Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 13.29 [8][11]. Core Views - The company has triggered the conditional redemption clause for its convertible bonds, which is expected to enhance its capital strength 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 - The company announced that from May 13, 2025, to June 9, 2025, the closing price of its convertible bonds has been above 130% of the conversion price, triggering the conditional redemption clause [2]. - As of the end of Q1 2025, the unconverted balance of the convertible bonds was RMB 10.5 billion, which will improve the capital adequacy ratio by 0.57 percentage points to 9.46% upon conversion [2]. Earnings and Dividends - As of June 9, 2025, the unconverted balance of the convertible bonds was approximately RMB 5.2 billion, 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 a competitive position in terms of profitability and dividend yield, 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 RMB 7 billion in purchases, reflecting strong confidence in the company's future [4]. Profit Forecast and Valuation - The profit forecast remains unchanged, with projected EPS for 2025, 2026, and 2027 at RMB 1.86, RMB 2.02, and RMB 2.23, respectively [5]. - The target PB ratio is set at 0.90x, with a target price of RMB 13.29, indicating a favorable valuation compared to peers [5].