Bank of Chengdu(601838) HTSC·2025-04-29 07:54Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 20.02 [8] Core Views - The company demonstrates stable performance with a solid foundation, as evidenced by a year-on-year increase in net profit, revenue, and pre-provision operating profit of 5.6%, 3.2%, and 3.5% respectively in Q1 2025 [1] - The company focuses on strengthening its deposit base through robust credit issuance, maintaining a leading position in the industry [2] - Financial investment remains stable, although there is a marginal decline in intermediary income due to market fluctuations [3] - Asset quality is stable, with non-performing loan ratios remaining low, although there are slight fluctuations in retail segments [4] - The company is projected to achieve a target price-to-book (PB) ratio of 0.95 for 2025, reflecting its strong fundamentals and expected valuation premium [5] Summary by Sections Performance Overview - In Q1 2025, the company reported a net profit of RMB 137.5 billion, with revenue growth slowing primarily due to declining interest margins [1] - The company plans to distribute a cash dividend of RMB 0.89 per share for 2024, maintaining a dividend payout ratio of 30% [1] Credit and Deposits - As of March, total assets, loans, and deposits increased by 13.3%, 16.9%, and 15.6% year-on-year, respectively, indicating strong credit expansion [2] - The company focuses on corporate loans, particularly in industrial park construction, which is expected to drive growth [2] Financial Investments - Investment income increased by 11% year-on-year in Q1 2025, although the growth rate has slowed due to bond market volatility [3] - Intermediary income saw a significant decline of 32.4% year-on-year, primarily due to reduced income from wealth management fees [3] Asset Quality - The company maintains a stable asset quality with a non-performing loan ratio of 0.66% and a provision coverage ratio of 456% as of March [4] - The annualized credit cost for Q1 2025 was 0.47%, reflecting a slight increase from the previous quarter but remaining within a low range [4] Valuation and Forecast - The company is projected to achieve net profits of RMB 137.5 billion, RMB 149.0 billion, and RMB 163.4 billion for 2025, 2026, and 2027 respectively [5] - The forecasted book value per share (BVPS) for 2025 is RMB 21.19, corresponding to a PB ratio of 0.83 [5]