Bank of Chengdu(SH:601838) Guotou Securities·2024-08-28 04:30Investment Rating - The investment rating for Chengdu Bank is "Buy -A" with a 6-month target price of 17.03 CNY, which corresponds to a 0.90X price-to-book ratio for 2024 [3][9]. Core Views - Chengdu Bank's performance in the first half of 2024 met expectations, with a revenue growth rate of 4.28% and a net profit growth rate of 10.60%. The growth was primarily driven by scale expansion, non-interest income growth, and provision releases, although net interest margin contraction and a slight increase in cost-to-income ratio posed challenges [1][9]. - The bank's asset quality remains robust, with a non-performing loan ratio of 0.66% and a provision coverage ratio close to 500%, indicating strong risk resistance capabilities [8][9]. Summary by Sections Financial Performance - Chengdu Bank's total assets grew by 16.73% year-on-year, with a significant contribution from corporate loans, which accounted for 63.88% of total asset growth in the second quarter [1]. - The bank's net interest margin was 1.66%, down 26 basis points year-on-year, primarily due to a decline in asset yield influenced by LPR adjustments and weak market demand [8][19]. - Non-interest income showed a strong recovery, with a year-on-year increase of 26.81% in the second quarter, driven by a 43.13% rise in net fee income [8][19]. Loan and Deposit Structure - Corporate loans (including discounts) increased by 138 billion CNY in the second quarter, while retail loan demand remained weak, with a net increase of only 31 billion CNY [2][8]. - The proportion of deposits in interest-bearing liabilities rose to 76.98%, with a slight increase in the share of retail deposits [7][8]. Future Outlook - The bank is expected to focus more on retail and entity lending in the second half of the year, particularly increasing its efforts in inclusive finance [2][9]. - Chengdu Bank's revenue is projected to grow by 4.55% year-on-year in 2024, with net profit growth expected at 13.39% [9][11].