Bank of RuiFeng(SH:601528) Huachuang Securities·2024-02-24 16:00Investment Rating - The report maintains a "Recommend" rating for Ruifeng Bank (601528) with a target price of 6.9 CNY, based on a projected PB of 0.72X for 2024 [20][26]. Core Viewpoints - Ruifeng Bank has shown significant improvement in its fundamentals since 2020, benefiting from high growth in scale and improved asset quality, with expected compound growth of around 15% [21][24]. - The bank's current competitive strength is at a mid-tier level within the industry, but it has the potential to rise to the top tier due to strong credit demand in Shaoxing and the exploration of personal operating loans [24][38]. - The bank's strategy includes expanding through inter-regional investments and enhancing ROE via equity investments in other rural commercial banks [23][24]. Summary by Sections Asset Structure and Quality Improvement - The bank has improved both its asset structure and quality, maintaining a growth rate of over 15% [32][46]. - The loan proportion has increased to over 60% from 2017 to 2022, indicating a shift towards retail business [21][39]. Competitive Position - Ruifeng Bank's performance metrics are currently in the mid-tier among A-share listed rural commercial banks, with significant growth potential [21][24]. - The bank's asset quality is improving, with a non-performing loan (NPL) ratio of 0.98% as of 9M23, ranking fourth among A-share listed rural commercial banks [21][39]. Future Development Potential - The bank has strong growth opportunities in its home region of Shaoxing, where credit demand is robust due to industrial upgrades [23][24]. - The bank is focusing on personal operating loans, which are expected to grow at over 20% annually in the next three years [24][39]. - Ruifeng Bank is also exploring inter-regional equity investments to enhance its ROE, leveraging its strong capital position [23][24]. Market Mechanism and Management Stability - The bank operates with a high degree of marketization, with a diverse shareholder structure and stable core management [24][38]. - The management team is experienced, with a focus on enhancing the bank's micro-loan business strategy [21][24].