Shanghai Pudong Development Bank Co., Ltd. – Value Analysis (SHANGHAI:600000) : September 12, 2017

Capitalcube gives Shanghai Pudong Development Bank Co., Ltd. a score of 54.

Our analysis is based on comparing Shanghai Pudong Development Bank Co., Ltd. with the following peers – Bank of Communications Co., Ltd. Class A, China Merchants Bank Co., Ltd. Class A, Bank of Beijing Co., Ltd. Class A, China Minsheng Banking Corp., Ltd. Class A and China Citic Bank Corporation Limited Class A (601328-CN, 600036-CN, 601169-CN, 600016-CN and 601998-CN).

Fundamental Overview

Shanghai Pudong Development Bank Co., Ltd. has a fundamental score of 54 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 0.97 is about median in its peer group.
  • The market expects 600000-CN to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • 600000-CN‘s relative capital efficiency and net profit margins are both around the median level.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • 600000-CN‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • 600000-CN‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s equity capital investment seems appropriate for a business with peer median returns.
  • 600000-CN seems to be constrained by the current level of debt.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 69.57% is around peer median suggesting that 600000-CN‘s lending operations does not benefit from any differentiating pricing advantage. In addition, 600000-CN‘s pre-tax margin of 43.44% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 30.43% is around peer median. In addition, 600000-CN‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 58.17x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Shanghai Pudong Development Bank Co., Ltd. engages in the provision of banking and financial services. It operates through the following geographical segments: Shanghai, Beijing, Sichuan, Tianjin, Shandong, Guangdong, Jiangsu, Henan, Zhejiang, Liaoning, and Others. It offers savings account, remittances, credit and debit cards, bank securities, foreign exchange, mortgage loans, online payment transactions, offshore banking, cash management solutions, deposits, and treasury markets. The company was founded on August 28, 1992 and is headquartered in Shanghai, China.