Huachuang Securities·2025-08-29 12:05Investment Rating - The report maintains a "Recommendation" rating for Chongqing Rural Commercial Bank (601077) with a target price of 7.8 CNY / 7.02 HKD [2]. Core Views - The bank has demonstrated significant effectiveness in managing liability costs, resulting in stable asset quality. The bank's net profit for the first half of 2025 increased by 4.63% year-on-year, supported by a reduction in credit impairment losses [2][5]. - The bank's total assets reached 1.63 trillion CNY, growing by 7.60% year-to-date, with total loans increasing by 7.14% and total deposits by 8.84% [5]. - The bank's non-interest income has declined by 16.56% due to market interest rate fluctuations and business expansion strategies [5]. Financial Performance Summary - Revenue and Profit: In the first half of 2025, the bank achieved operating revenue of 147.41 billion CNY, a slight increase of 0.46% year-on-year, and a net profit attributable to shareholders of 76.99 billion CNY, up 4.63% [2]. - Asset Quality: The non-performing loan (NPL) ratio stood at 1.17%, down 1 basis point from the beginning of the year, with a provision coverage ratio of 355.58%, down 7.86 percentage points [2][5]. - Loan Growth: Corporate loans were the main growth driver, with a balance of 4.16 trillion CNY, a significant increase of 16.25% year-to-date [5]. Key Financial Indicators - Net Interest Margin: The net interest margin for the first half of 2025 was 1.60%, showing a slight decrease of 3 basis points year-on-year [5]. - Earnings Forecast: The projected revenue growth rates for 2025E-2027E are 1.5%, 4.5%, and 5.8%, respectively, while net profit growth rates are expected to be 4.6%, 4.8%, and 5.3% [5][6]. - Valuation Metrics: The current stock price corresponds to a 2025E price-to-book (PB) ratio of 0.55X, with a target PB of 0.68X, indicating growth potential based on regional advantages and business characteristics [5].