Bank of RuiFeng(SH:601528) Huaan Securities·2024-06-12 03:30Investment Rating - The investment rating for the company is "Buy" (first coverage) [2]. Core Views - The report emphasizes that Zhejiang Rural Credit is at the forefront of reform, seizing policy opportunities to initiate shareholding reform, clarifying property rights, and promoting a healthy development landscape for commercial banks [2][3]. - The bank has a strong market position in Shaoxing Keqiao District, benefiting from the region's economic growth and industrial clustering effects, which are expected to enhance credit demand [3]. - The bank's asset quality is stable, focusing on small and micro retail clients, with risks from macroeconomic disturbances expected to be cleared quickly [3]. - The bank's capital adequacy ratio is among the top tier of listed banks, and it is expected to enter a period of internal growth by increasing profits and capital through investments in Zhejiang Rural Credit's sister banks [3]. Summary by Sections Company Overview - Ruifeng Bank, formerly Shaoxing County Credit Union, has been operating locally for over 70 years, developing specialized competitive advantages in textiles, small and micro enterprises, and agricultural finance [3][19]. - The bank has a total share capital of 1,962 million shares, with a market capitalization of 9.6 billion yuan [2]. Financial Performance - In Q1 2024, the bank's total assets increased by 13.76% year-on-year, and loans grew by 12.47% year-on-year [3]. - Revenue for 2023 was 3.804 billion yuan, with a projected growth of 8.43% in 2024, and net profit for 2023 was 1.727 billion yuan, with a forecasted growth of 12.45% in 2024 [17]. Market Position - Ruifeng Bank holds a leading market share in Shaoxing Keqiao District, with a loan market share of 20.34% and a deposit market share of 32.23% as of 2023 [3][74]. - The bank's strategy includes expanding its market presence in neighboring cities such as Yuecheng and Yiwu, leveraging its successful business model in Keqiao [3][77]. Growth Prospects - The report forecasts that the bank's operating income will grow by 8.43% in 2024, 8.23% in 2025, and 7.96% in 2026, with net profit growth of 12.45%, 10.44%, and 10.47% respectively [3][17]. - The bank's net interest margin is expected to improve significantly if credit demand recovers beyond expectations [3].