SRCB(601825) 华创证券·2024-06-29 08:02Investment Rating - The report gives a "Recommend" rating to Shanghai Rural Commercial Bank (SRCB) with a target price of 7.67 yuan, compared to the current price of 6.72 yuan [2][3] Core Views - SRCB is a trillion-level provincial rural commercial bank deeply rooted in Shanghai's suburbs, with over 98% of its branches located in Shanghai and nearly 77% in suburban areas [1] - The bank has significant regional advantages, with Shanghai's GDP reaching 4.7 trillion yuan in 2023, ranking first among Chinese cities, and per capita disposable income and consumption expenditure also leading the nation [1] - SRCB is transitioning from real estate-focused business to new growth drivers in rural microfinance and technology finance, with technology enterprise loans growing 29.9% YoY in 2023 [1] - The bank is accelerating its retail transformation, focusing on non-mortgage retail loans and wealth management, with retail AUM reaching 745.9 billion yuan in 2023 [1] - SRCB maintains strong profitability with ROE consistently above industry average, driven by cost advantages and intermediate business income [1] Business Analysis Regional Advantages - SRCB benefits from Shanghai's economic prosperity, with suburban areas showing significant growth potential due to the "Five New Cities" development plan [1] - The bank has a strong presence in Shanghai's suburbs, with 274 suburban branches accounting for nearly 77% of its Shanghai network [12] - SRCB is expanding its footprint in the Yangtze River Delta region through branch networks, financial headquarters, and strategic investments [12] Corporate Banking - SRCB is developing two new business cards: rural microfinance and technology finance [1] - The bank's rural microfinance business has grown rapidly, with a 28.6% CAGR from 2018 to 2023 [1] - Technology finance has become a distinctive feature, with technology enterprise loans reaching 92.516 billion yuan in 2023, accounting for 20.5% of corporate loans [1] Retail Banking - SRCB is optimizing its retail loan structure, increasing the proportion of personal consumption and business loans [1] - The bank's wealth management business is growing, with retail AUM reaching 745.9 billion yuan in 2023 [1] - SRCB has a strong position in pension finance, ranking second in Shanghai's pension distribution market with 1.22 million pension distribution customers [1] Financial Performance - SRCB maintains strong profitability, with ROE consistently above industry average [1] - The bank's net interest margin is expected to decline slightly but remain stable, with 2024-2026 forecasts of 1.39%, 1.33%, and 1.28% respectively [7] - Intermediate business income is expected to recover, with projected growth rates of -15%, -10%, and 2% for 2024-2026 [7] Asset Quality - SRCB maintains excellent asset quality, with non-performing loan ratio consistently below 1% [1] - The bank's technology finance business shows particularly strong asset quality, with a non-performing loan ratio of only 0.2% in 2022 [54] - Retail loan quality has slightly declined but remains better than industry average, with a non-performing loan ratio of 1.12% in 2023 [54]