Bank Of Chongqing(601963) GOLDEN SUN SECURITIES·2024-06-02 08:02Investment Rating - The report assigns a "Buy" rating for Chongqing Bank, marking its initial coverage [1][7]. Core Views - The report highlights that the negative impact of interest margin is diminishing, and the pressure from new non-performing loans is easing, indicating a clear improvement in the bank's fundamentals [2][3][7]. Summary by Sections Overview of Chongqing Bank - Chongqing Bank, established in 1996, has a strong focus on corporate banking, with 70% of its revenue and 75% of its profit derived from corporate business. The bank's total assets reached 780.8 billion yuan, with a loan total of 407.5 billion yuan as of Q1 2024 [2][12][20]. Key Focus Areas 1. Regional Economic Recovery: The economic recovery in Chongqing is expected to drive loan growth, with a loan growth rate projected to stabilize around 10% [3][7]. 2. Interest Margin Improvement: The bank's net interest margin was 1.52% in 2023, with expectations for a slower decline in 2024 due to adjustments in personal consumption loans and the repricing of long-term high-interest deposits [5][6]. 3. Easing Asset Quality Pressure: The non-performing loan ratio was 1.33% as of Q1 2024, showing a slight decrease from the end of 2022, with a notable decline in the new non-performing loan generation rate [6][7]. Financial Forecast and Investment Recommendations - The report forecasts Chongqing Bank's net profit attributable to shareholders to be 5.17 billion yuan in 2024, with a growth rate of 5.0% [8][9]. The bank's price-to-book ratio is projected to be 0.50x in 2024, indicating potential for valuation recovery [7][9].