Bank of Chengdu(601838) 天风证券·2024-11-08 12:00Investment Rating - The report assigns a "Buy" rating to Chengdu Bank with a target price of 19.17 RMB, representing a 21% upside from the current price of 15.78 RMB [7][5] Core Investment Thesis - Chengdu Bank is positioned as a leading city commercial bank in Western China, benefiting from the strategic upgrade of the Chengdu-Chongqing Economic Circle to a national-level economic strategy [1] - The bank has achieved trillion-level assets, making it the first city commercial bank in Western China to reach this milestone, with healthy asset quality and strong growth momentum [1] - The bank's deep local government background and focus on corporate and government credit business provide a solid foundation for its growth [1] Regional Economic Development - The Chengdu-Chongqing Economic Circle has been upgraded to a national-level strategy, with GDP growth significantly higher than the national average since 2020 [2] - Sichuan Province's GDP reached 2.9 trillion RMB in Q2 2024, ranking 6th nationally, with a 5.60% YoY growth [17] - Chengdu's GDP in 2023 reached 2.2 trillion RMB, ranking 7th nationally and 2nd among provincial capitals, with a 6% growth rate [27] Credit Business and Asset Quality - Chengdu Bank's corporate loan business is the primary driver of its growth, with a 24.9% YoY increase in corporate loans in Q3 2024, accounting for 81.6% of total loans [42] - Infrastructure-related loans are the core of the bank's corporate loan business, reaching 372.7 billion RMB in H1 2024, accounting for 52.8% of total loans and 65% of corporate loans [43] - The bank maintains the lowest non-performing loan ratio among all commercial banks, with a high provision coverage ratio, providing a strong safety cushion for its assets [4] Profitability and Valuation - The bank's net profit is expected to grow at a CAGR of 5.67%, 9.90%, and 8.33% from 2024 to 2026, with a target price of 19.17 RMB based on a dividend discount model [5] - The bank's P/E ratio is expected to decrease from 5.87 in 2022 to 4.10 in 2026, while the P/B ratio is expected to decrease from 0.96 in 2022 to 0.72 in 2026 [6] Industry Comparison - Chengdu Bank has the highest proportion of corporate loans among its peers, with 63.6% of interest-earning assets being loans, of which 53.4% are corporate loans [59] - The bank's infrastructure loan growth rate of 37.2% in H1 2024 is higher than most of its peers, with infrastructure loans accounting for 64.6% of corporate loans, ranking second among city commercial banks [50] Future Growth Drivers - Chengdu Bank is actively supporting the manufacturing sector's transformation and upgrading, with manufacturing loans reaching 46.3 billion RMB in H1 2024, a 4.57% YoY increase [56] - The bank has achieved full coverage of financial services for 28 key industrial chains in Chengdu, with over 90% coverage for specialized and innovative "little giant" enterprises and over 80% coverage for companies listed on the STAR Market and ChiNext [55]