Chongqing Rural Commercial Bank Co Ltd
SSE:601077
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Intrinsic Value
The intrinsic value of one Chongqing Rural Commercial Bank Co Ltd stock under the Base Case scenario is 11.17 CNY. Compared to the current market price of 5.45 CNY, Chongqing Rural Commercial Bank Co Ltd is Undervalued by 51%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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Fundamental Analysis
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Chongqing Rural Commercial Bank Co Ltd
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Chongqing Rural Commercial Bank Co Ltd (CRC Bank) emerged as a significant player in the financial landscape of China, particularly focusing on the rural and small-to-medium enterprise (SME) sectors. Founded in 2001 and headquartered in the vibrant municipality of Chongqing, the bank has positioned itself as a vital financial conduit for local businesses and farming communities, responding to their unique banking needs. With a strong emphasis on agricultural financing and rural development, CRC Bank has established a network that not only supports economic growth in the region but also aligns with the Chinese government's push towards rural revitalization. This strategy has allowed the bank...
Chongqing Rural Commercial Bank Co Ltd (CRC Bank) emerged as a significant player in the financial landscape of China, particularly focusing on the rural and small-to-medium enterprise (SME) sectors. Founded in 2001 and headquartered in the vibrant municipality of Chongqing, the bank has positioned itself as a vital financial conduit for local businesses and farming communities, responding to their unique banking needs. With a strong emphasis on agricultural financing and rural development, CRC Bank has established a network that not only supports economic growth in the region but also aligns with the Chinese government's push towards rural revitalization. This strategy has allowed the bank to develop a diverse portfolio of services, catering to individual customers, farmers, and enterprises looking for reliable, accessible banking options.
As an investor, understanding CRC Bank's strong foundation and growth potential is key. The bank has benefitted from significant state backing, solidifying its place within a robust regulatory framework that emphasizes stability and long-term growth. Its focus on rural and urban integration positions it well to tap into the growing demand for financial services in underbanked areas. Additionally, CRC Bank has shown resilience in navigating challenges in the financial sector, with a prudent risk management approach and a consistent track record of profitability. As the Chinese economy continues to evolve, particularly in the wake of urbanization trends, CRC Bank is well-poised to offer investors an intriguing opportunity for long-term returns driven by improving regional economies and a growing customer base.
Chongqing Rural Commercial Bank Co., Ltd. (CQRCB) primarily operates in various core business segments integral to its overall operations. These segments typically include:
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Corporate Banking: This segment involves providing financial services and products to businesses, including loans, credit facilities, and treasury management. CQRCB supports both large enterprises and small to medium-sized enterprises (SMEs), focusing on enhancing the liquidity and capital needs of businesses in rural and urban areas.
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Retail Banking: CQRCB offers a wide range of personal banking services to individual customers, such as savings accounts, personal loans, mortgages, and credit cards. The retail segment is crucial for leveraging deposits and facilitating financial inclusion among rural residents.
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Wealth Management: The bank provides wealth management services, including investment products, financial planning, and advisory services. This segment aims to cater to high-net-worth individuals and retail customers looking to manage their personal finances and investments.
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Treasury Operations: This involves managing the bank’s liquidity and funding requirements, foreign exchange transactions, and interest rate risk. The treasury segment plays an essential role in maintaining the financial stability and profitability of the bank.
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Investment Banking: While not a primary focus, CQRCB may also engage in investment banking activities such as underwriting and advisory services related to mergers and acquisitions for corporate clients.
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Rural Finance: Given its roots and name, CQRCB places a significant emphasis on rural finance, providing tailored financial solutions to support agricultural development and rural economic growth.
CQRCB's focus on these core business segments reflects its strategy to serve both the urban and rural populations, enhancing financial accessibility and supporting regional economic development.
Chongqing Rural Commercial Bank Co., Ltd. (CRCB) possesses several unique competitive advantages that may distinguish it from its rivals in the banking sector. Here are some of those advantages:
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Local Market Knowledge: Being based in Chongqing, CRCB has a deep understanding of the local economy, customer preferences, and community needs. This local insight enables the bank to tailor its products and services effectively.
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Strong Community Ties: CRCB likely has stronger relationships with rural communities compared to national banks. These social connections can foster customer loyalty and trust, contributing to a stable customer base.
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Focus on Rural Development: As a rural commercial bank, CRCB can capitalize on opportunities in underserved markets, particularly in agricultural financing and rural development programs, which may be overlooked by larger urban-centric banks.
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Targeted Financial Products: CRCB can offer specialized products that cater specifically to the agricultural sector, small businesses, and rural households, providing them tailored financial solutions that larger banks may not focus on.
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Government Support: Being a rural bank, CRBC may benefit from favorable government policies aimed at promoting rural financial inclusion and development, allowing it to access resources and support that could enhance its competitive position.
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Cost Efficiency: Smaller banks often have lower overhead costs compared to larger institutions. CRCB may leverage this efficiency to offer competitive pricing on loans and services.
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Adaptability and Agility: Being smaller than its larger competitors, CRCB can be more agile in responding to market changes, allowing for quicker decision-making and the ability to innovate in product offerings.
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Strong Capital Base: If CRCB has a robust capital base, this can provide a strong cushion against market volatility, enhancing its ability to lend and invest compared to more leveraged competitors.
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Enhanced Technology Adoption: Investments in technology for digital banking solutions can provide CRCB with competitive advantages in accessibility and convenience for customers, particularly in a landscape increasingly moving online.
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Diverse Clientele: The bank's focus on a variety of sectors, including agriculture, rural enterprises, and local businesses, can mitigate risks associated with economic downturns in specific industries.
These competitive advantages, if leveraged correctly, can position Chongqing Rural Commercial Bank as a strong player in the rural banking sector, allowing it to sustain growth and profitability even in a competitive landscape.
Chongqing Rural Commercial Bank Co Ltd, like many other financial institutions, faces a variety of risks and challenges that could impact its operations and profitability. Here are some of the key risks and challenges the bank may face in the near future:
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Economic Fluctuations: The Chinese economy is experiencing changes, which can affect the bank's loan portfolio and deposit base. Slowing economic growth, trade tensions, or fluctuations in commodity prices can impact borrower repayment capabilities.
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Regulatory Environment: As a financial institution, regulatory compliance is crucial. Any changes in banking regulations, capital requirements, or financial practices by the Chinese government may impose additional compliance costs or operational challenges.
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Credit Risk: The bank has exposure to credit risk, particularly from agricultural loans and small and medium-sized enterprises (SMEs). An increase in defaults or non-performing loans can significantly affect profitability.
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Interest Rate Risk: Changes in interest rates can impact the bank's net interest margin, affecting profitability. Furthermore, if rates increase, borrowers may face higher repayment costs, potentially leading to increased defaults.
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Liquidity Risk: Maintaining sufficient liquidity is essential for bank operations. Any disruptions in funding sources or increased demand for withdrawals can lead to financial strain.
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Competitive Pressure: The banking sector in China is highly competitive, with numerous players vying for market share. Increased competition from both traditional banks and new fintech companies may pressure margins and customer retention.
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Technological Challenges: As digital banking continues to evolve, the bank must invest in technology and cybersecurity. The rapid advance of fintech can pose both an opportunity and a risk, requiring the bank to adapt quickly to changing consumer preferences and technological standards.
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Rural Economic Challenges: As a rural commercial bank, its performance is linked to the health of the rural economy. Factors such as drought, fluctuating agricultural prices, and rural depopulation can adversely affect loan repayment capabilities.
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Geopolitical Risks: Regional tensions and trade issues can pose risks not only to the broader economy but also to the specific sectors that the bank serves, such as agriculture and manufacturing.
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Environmental and Social Factors: Increasing concerns about environmental sustainability and social governance could affect lending practices and risk assessments, especially in sectors linked to agriculture and rural development.
By identifying and addressing these risks, Chongqing Rural Commercial Bank can develop strategies to mitigate their impact and ensure long-term sustainability and growth.
Balance Sheet Decomposition
Chongqing Rural Commercial Bank Co Ltd
Net Loans | 676.7B |
Investments | 700.6B |
PP&E | 4.8B |
Intangibles | 605m |
Other Assets | 127.1B |
Total Deposits | 941.6B |
Short Term Debt | 89B |
Long Term Debt | 15.5B |
Other Liabilities | 336.4B |
Wall St
Price Targets
Price Targets Summary
Chongqing Rural Commercial Bank Co Ltd
According to Wall Street analysts, the average 1-year price target for Chongqing Rural Commercial Bank Co Ltd is 6.55 CNY with a low forecast of 4.86 CNY and a high forecast of 7.56 CNY.
Dividends
Current shareholder yield for Chongqing Rural Commercial Bank Co Ltd is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Profile
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Description
Chongqing Rural Commercial Bank Co Ltd is a CN-based company operating in Banks industry. The company is headquartered in Chongqing, Chongqing and currently employs 14,905 full-time employees. The company went IPO on 2010-12-16. Chongqing Rural Commercial Bank is engaged in the provision of banking services and related financial services in China. The firm operates its businesses through three segments. The Corporate Banking segment is engaged in the provision of financial products and services to corporations, government agencies and financial institutions. The Personal Banking segment is engaged in the provision of financial products and services to individual customers. The Financial Market Operations segment is engaged in the money market, repurchase transactions and debt instruments investment for its own account or on behalf of customers.
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The intrinsic value of one Chongqing Rural Commercial Bank Co Ltd stock under the Base Case scenario is 11.17 CNY.
Compared to the current market price of 5.45 CNY, Chongqing Rural Commercial Bank Co Ltd is Undervalued by 51%.