Bank of RuiFeng(601528) 长江证券·2025-05-07 02:44Investment Rating - The report maintains a "Buy" rating for the company [9]. Core Views - The company achieved a 5.1% year-on-year increase in operating income and a 6.7% increase in net profit attributable to shareholders in Q1 2025. The non-performing loan ratio remained stable at 0.97%, with a provision coverage ratio of 326%, indicating improved risk mitigation capabilities [2][6]. - The company is recognized as a "dark horse" in the small and micro banking sector, with consistently strong performance and asset quality. It has invested in high-quality rural commercial banks in Zhejiang, enhancing its return on equity (ROE) independent of economic cycles. The current valuation stands at 0.51 times the 2025 price-to-book ratio [2][6]. Summary by Sections Financial Performance - In Q1 2025, the company reversed the trend of declining net interest income, achieving a positive growth of 2.7%. This is expected to continue throughout the year. The decline in funding costs, particularly for deposits, is a key factor in this improvement [2][6]. - The total loan amount increased by 4.4% compared to the beginning of the year, with public loans growing by 7.6% and retail loans by 0.6%. The company anticipates maintaining double-digit growth in credit this year despite some weakness in retail loan demand [2][6]. Asset Quality - The company's asset quality is significantly better than its peers in the small and micro banking sector, with a non-performing loan net generation rate of 0.59%. The provision coverage ratio has been on a continuous upward trend since the company's listing [2][6]. Strategic Investments - The company is steadily advancing its strategic investments in small banks, having increased its stake in Cangnan Rural Commercial Bank to 7.58%. This is expected to contribute positively to investment income and capital gains, further enhancing ROE [2][6].