Chongqing Rural Commercial Bank(HK:03618) Guotai Junan Securities·2024-05-06 03:32Investment Rating - The report maintains a "Buy" rating for Chongqing Rural Commercial Bank [5][3]. Core Views - The bank's Q1 2024 performance met expectations, with stable revenue and a slight decline in net profit. Credit issuance is becoming more balanced, and asset quality remains stable [3][4]. - The report adjusts the net profit growth forecast for 2024-2026 to 3.23%/5.40%/7.45%, with corresponding EPS of 0.99/1.04/1.12 RMB. The target price is set at 4.45 HKD, corresponding to a 0.38x PB for 2024 [3][4]. Financial Summary - Revenue for Q1 2024 decreased by 2.9% year-on-year, while other non-interest income grew by 46.7%. Investment income significantly increased, supporting revenue performance [3]. - The cost-to-income ratio decreased by 5.81 percentage points to 27.21%, leading to a 5.44% year-on-year increase in pre-provision profit [3]. - Net profit growth declined by 10.8% year-on-year due to a low base from significant bad asset recoveries in Q1 2023 [3]. - Total assets grew by 4.1% year-on-year, with loans increasing by 4.9%. Corporate loans grew by 7.0%, while retail loans increased by 1.4% [3][4]. - The net interest margin for Q1 was estimated at 1.50%, with net interest income declining by 9.2% year-on-year [3]. - As of the end of Q1, the non-performing loan balance increased by 215 million RMB, with a non-performing loan ratio of 1.19%, unchanged from the end of 2023 [3][4].