Bank of Chengdu(SH:601838) ZHONGTAI SECURITIES·2024-10-30 11:00Investment Rating - The investment rating for Chengdu Bank is "Accumulate" (maintained) [1]. Core Views - Chengdu Bank's Q3 2024 report indicates a stabilization and recovery in net interest margin, leading to a slight increase in net profit growth to 10.8%. The bank's asset quality remains excellent, with a low non-performing loan ratio of 0.66% [2][6][13]. Summary by Sections Q3 Report Overview - The net interest margin has stabilized and increased, contributing to a positive turnaround in net interest income growth, which rose by 1.8% quarter-on-quarter. The cumulative year-on-year revenue growth decreased by 1.1 percentage points to 3.2% due to a decline in wealth management scale [2][6][15]. Net Interest Income - In Q3, the net interest margin increased by 2 basis points to 1.59%, primarily due to a decrease in the cost of liabilities. The annualized net interest income growth turned positive, reflecting a 5.75 percentage point improvement from the previous quarter [9][10]. Asset and Liability Growth and Structure - Chengdu Bank's loan issuance in Q3 was robust, with a total loan issuance of 14.6 billion yuan, maintaining a similar level to the previous year. Personal loans showed a notable increase, with a quarter-on-quarter rise of 2.25 billion yuan [9][10]. Asset Quality - The bank's asset quality remains strong, with a non-performing loan ratio of 0.66%, stable compared to the previous quarter. The provision coverage ratio increased to 497.36%, indicating a solid buffer against potential loan losses [13][14]. Other Financial Metrics - The bank's core tier 1 capital adequacy ratio improved, reaching 8.40% in Q3 2024, reflecting a positive trend in capital management [15]. Investment Recommendations - The report suggests a price-to-book (PB) ratio of 0.80X for 2024E, 0.70X for 2025E, and 0.62X for 2026E, with a price-to-earnings (PE) ratio of 4.60X for 2024E, 4.25X for 2025E, and 3.87X for 2026E. The bank's operations are expected to remain stable, with a strong focus on retail and infrastructure [16][19].