NJBK(SH:601009) ZHESHANG SECURITIES·2026-02-04 08:24Investment Rating - The report maintains a "Buy" rating for Nanjing Bank, with a target price of 16.26 CNY per share, indicating a potential upside of 54% from the current price [3]. Core Views - Nanjing Bank is expected to experience a strong recovery in profitability, supported by both fundamental improvements and favorable trading conditions. The bank's return on equity (ROE) is projected to enter an upward trajectory, with net profit growth forecasted at 8.08% for 2025, 9.54% for 2026, and 8.86% for 2027 [3][9]. Summary by Sections 1. Capital Injection and Operational Improvement - Nanjing Bank's performance has shown a U-shaped recovery since 2024, with revenue and net profit growth rates improving significantly compared to 2023 [16]. - The bank's non-performing loan (NPL) ratio was at a low of 0.83% as of Q4 2024, down 7 basis points from the previous year [16]. - The bank's cost-to-income ratio has improved, standing at 23.3% for the first three quarters of 2025, a decrease of 2 percentage points year-on-year [16][25]. 2. High Dividend Yield and Strong Trading Support - Nanjing Bank's dividend yield is projected to be 5.0% for 2025, which is 56 basis points higher than the average for city commercial banks [2][45]. - The bank's price-to-book (PB) ratio is 0.72x, lower than other quality regional city commercial banks, indicating potential for valuation recovery [2][45]. - The ownership structure is favorable, with major shareholders having room to increase their holdings, which supports trading strength [2][47]. 3. Profitability Forecast and Valuation - The bank's net profit is expected to grow at rates of 8.08%, 9.54%, and 8.86% for the years 2025, 2026, and 2027, respectively, with corresponding book values per share of 14.64, 16.26, and 17.69 CNY [3][11]. - The current price corresponds to a PB valuation of 0.72, 0.65, and 0.60 for the years 2025 to 2027, indicating a favorable valuation compared to peers [3][11]. 4. Management and Strategic Direction - The management team, led by Chairman Xie Ning and President Zhu Gang, is noted for their strong capabilities and commitment to enhancing operational performance and value creation [41]. - The bank's strategic initiatives, including a three-year plan to double effective customer numbers, are expected to drive future growth [29][41].