Study On The Stock Valuation Of Bank Of Nanjing

Commercial Bank is the credit intermediary that enables to balance the surplus and shortage of social capital.It plays an indispensable role in the development process of our country.At the end of 2016,there were 25 listed commercial banks that accounted for 13.57% of the total market value of the A-share market.It can be seen that the capitalization fluctuation of listed commercial banks is of great significance to the domestic stock market.Therefore,the accurate valuation of commercial banks can provide investors effective references to make right investment strategies.In addition,with the rapid economic development of China,increasing number of commercial banks,increasingly fierce competition and progressive supervision in the banking system,more commercial banks are enthusiastic to supplement capital,improve their management and competitiveness through listing and seasoned equity offerings.However,both listing and seasoned equity offering are based on reasonable valuation and pricing of equity.In the context of the particularity of commercial banks compared with the general enterprises in China,this paper considers that the model of economic value added and the model of P/B ratio have stronger applicability to the stock valuation of commercial banks in China.And in recent years,city commercial banks and joint-equity commercial banks in China have shown a trend of accelerated growth.They are expected to be the group of commercial banks that are more eager for listing and seasoned equity offerings.Thus,this paper picks Bank of Nanjing which is the first city commercial bank in China and has successfully transformed into a joint-equity commercial bank as the object of valuation.On the basis of the current operating environment and situation analysis,the paper uses the two models mentioned above to calculate the reasonable stock value of Bank of Nanjing to offer a reference for the ones who tend to price it.Furthermore,this paper also makes a sensitivity analysis toward the valuation under the economic value added model to explore the remarkable factors that influence the valuation of Bank of Nanjing and put forward some advice and strategies about the value enhancement for its management.