Bank of Chengdu(SH:601838) Guotou Securities·2024-10-30 08:23Investment Rating - The investment rating for Chengdu Bank is "Accumulate-A" with a target price of 17.03 CNY, compared to the current stock price of 15.50 CNY as of October 29, 2024 [3][7]. Core Views - Chengdu Bank's asset quality remains excellent, with a non-performing loan ratio of 0.66% and a provision coverage ratio of 497.40% as of the end of Q3 2024 [7][16]. - The bank's revenue growth for the first three quarters of 2024 is 3.23%, with a net profit growth of 10.81% [1][6]. - The bank is expected to achieve a loan growth of 20% year-on-year for the full year 2024, despite a slowdown in growth in the second half of the year due to macroeconomic factors [2][3]. Summary by Sections Financial Performance - Chengdu Bank's total assets increased by 14.92% year-on-year as of Q3 2024, although the growth rate has slowed compared to previous quarters [1][2]. - The bank's net interest margin is projected to be 1.52% for the first three quarters of 2024, reflecting a decline of 35 basis points year-on-year [5][6]. - The bank's net non-interest income decreased by 0.41% year-on-year in Q3 2024, with a significant drop in fee and commission income by 19.10% [6][7]. Asset Quality - The bank's asset quality is highlighted by a low non-performing loan ratio and a high provision coverage ratio, indicating strong risk management [7][16]. - The focus on public finance and infrastructure projects is expected to provide growth opportunities, supported by government initiatives in the Chengdu region [7][16]. Loan and Deposit Trends - Public loans increased by 93 million CNY in Q3 2024, reflecting a shift in focus from public finance to real economy sectors [2][3]. - Retail loans showed a slight recovery with a year-on-year growth of 11.47% as of Q3 2024, indicating a strategic pivot towards inclusive finance [2][3]. Future Outlook - The bank anticipates a revenue growth of 4.55% and a profit growth of 13.39% for the full year 2024, driven by its robust asset quality and strategic focus on key sectors [7][8]. - The overall economic environment is expected to impact loan growth rates, but the bank's strong position in the Chengdu market is seen as a buffer against broader economic challenges [3][7].