Bank Of Chongqing(601963) 西南证券·2025-01-01 08:57Investment Rating - The report does not explicitly state an investment rating for the company. Core Insights - The economic growth in Chongqing is robust, with a GDP growth rate of 6.0% year-on-year in Q3 2024, positioning it second nationally, indicating significant future growth potential [1]. - The bank benefits from a relatively low mortgage exposure of 9.6%, below the average of listed banks, and is expected to see a notable support for its interest margin due to the upcoming repricing of high-interest deposits [1]. - The non-performing loan (NPL) ratio has been consistently declining, reaching 1.26% as of Q3 2024, down by 0.08 percentage points from the end of the previous year [2]. Summary by Sections Section 1: Company Overview - The bank is well-positioned in Chongqing, with a balanced shareholding structure where the Chongqing State-owned Assets Supervision and Administration Commission is the largest shareholder, holding 25.7% [15]. - The management team has extensive experience in the local market, which aids in executing regional development strategies [25]. Section 2: Economic and Strategic Advantages - Chongqing is a key national center city with significant strategic advantages, including a strong economic growth trajectory and supportive policies that enhance market potential [48][54]. - The bank is actively involved in the construction of the Chengdu-Chongqing economic circle, contributing over 130 billion yuan in credit support in 2023 [56]. Section 3: Business Operations - The bank's total assets have shown stable growth, reaching 824.1 billion yuan by Q3 2024, with a projected path towards a trillion yuan in the coming years [60]. - The loan-to-deposit ratio has been increasing, with corporate loans making up a growing share of the bank's portfolio, reflecting its focus on supporting local enterprises [71]. Section 4: Financial Performance - The bank's interest margin is expected to remain stable due to its low mortgage exposure and the anticipated repricing of deposits [1][4]. - The bank's asset quality is improving, with a decrease in new non-performing loans, which is likely to enhance return on equity (ROE) and valuation recovery [2]. Section 5: Future Outlook - The bank is expected to benefit from the ongoing economic development in Chongqing, with policies aimed at reducing debt burdens and enhancing growth potential [62][63]. - The bank's technology investments are increasing, with a focus on enhancing operational efficiency and reducing costs [41].