Shenwan Hongyuan Securities·2025-12-15 12:22Investment Rating - The report initiates coverage with an "Accumulate" rating for Chongqing Rural Commercial Bank (601077) [1] Core Views - The bank is positioned to benefit from high dividend yields and a solid provisioning base, with expectations for valuation improvement due to its strong performance and new management goals [7][8] - The bank's extensive network in rural areas provides a competitive advantage, allowing it to capitalize on regional growth opportunities [7][10] Summary by Sections 1. Company Overview - Chongqing Rural Commercial Bank has a total asset size of approximately 1.66 trillion yuan, ranking first among listed rural commercial banks [20] - The bank has over 1,700 branches, with 82.4% located in rural areas, providing a strong deposit base and low funding costs [20][22] 2. Financial Data and Profit Forecast - Projected total revenue for 2025 is approximately 28.61 billion yuan, with a year-on-year growth rate of 1.23% [6] - Expected net profit for 2025 is around 12.10 billion yuan, reflecting a growth rate of 5.09% [6] - The bank's return on equity (ROE) is projected to be 9.27% in 2025, with a gradual improvement expected in subsequent years [6] 3. Investment Analysis - The bank is expected to gradually eliminate its valuation discount due to its robust performance and high dividend yield, which is projected to be nearly 5% in 2025 [8] - The anticipated growth rates for net profit from 2025 to 2027 are 5.1%, 9.5%, and 10.2%, respectively [9][8] - The report highlights the potential for asset growth driven by urban expansion and improved operational efficiency [10][30] 4. Management and Strategic Direction - The new management team, led by Liu Xiaojun, aims to significantly enhance key performance indicators by the end of 2027 [10][30] - The bank's strategy includes penetrating urban markets to increase loan productivity and overall asset size [10][30] 5. Market Position and Competitive Advantage - The bank benefits from low deposit costs and a strong credit quality foundation, which supports its competitive net interest margin [32] - The bank's credit cost is projected to remain low, further enhancing its profitability [32]