Bank of Chengdu Co Ltd
SSE:601838
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Intrinsic Value
The intrinsic value of one Bank of Chengdu Co Ltd stock under the Base Case scenario is 57.36 CNY. Compared to the current market price of 15.36 CNY, Bank of Chengdu Co Ltd is Undervalued by 73%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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Bank of Chengdu Co Ltd
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Fundamental Analysis
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Bank of Chengdu Co., Ltd. (BCD) offers a fascinating glimpse into the evolving landscape of banking in China. Established in 1996 and headquartered in Chengdu, Sichuan Province, the bank operates with a focus on providing comprehensive financial services, including retail banking, corporate banking, and wealth management. As a city representative of the rapidly growing southwestern region, Chengdu acts as a strategic hub for BCD's operations, allowing the bank to develop robust relationships with local businesses and contribute to regional economic growth. With a strong emphasis on digital transformation and customer-focused innovations, BCD has successfully attracted a substantial retail cu...
Bank of Chengdu Co., Ltd. (BCD) offers a fascinating glimpse into the evolving landscape of banking in China. Established in 1996 and headquartered in Chengdu, Sichuan Province, the bank operates with a focus on providing comprehensive financial services, including retail banking, corporate banking, and wealth management. As a city representative of the rapidly growing southwestern region, Chengdu acts as a strategic hub for BCD's operations, allowing the bank to develop robust relationships with local businesses and contribute to regional economic growth. With a strong emphasis on digital transformation and customer-focused innovations, BCD has successfully attracted a substantial retail customer base—an impressive feat that positions it well in the competitive Chinese banking sector.
For investors, Bank of Chengdu represents a blend of growth potential and stability. The bank has showcased impressive financial performance, evidenced by steady growth in total assets and net profits over the years. With a well-managed portfolio, BCD has implemented sound risk management practices that have mitigated potential challenges arising from the dynamic economic environment. Importantly, the bank's commitment to leveraging technology enhances its operational efficiencies and customer engagement, setting it on a path to remain relevant in an increasingly digital era. As China continues to embrace urbanization and economic reform, BCD stands out as a promising investment opportunity, offering the potential for solid returns aligned with the broader growth narrative of the region.
Bank of Chengdu Co., Ltd. is a commercial bank based in Chengdu, Sichuan Province, China. It offers a range of financial services and operates in various core business segments. Here are the main segments:
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Retail Banking: This segment includes a wide array of services for individual customers, such as savings accounts, personal loans, credit cards, wealth management services, and other retail financial products. The retail banking segment relies heavily on customer deposits to finance its loan portfolio.
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Corporate Banking: Bank of Chengdu provides financial services to businesses and corporations, including corporate loans, trade finance, cash management services, and treasury services. This segment caters to small and medium enterprises (SMEs) as well as larger corporations, playing a crucial role in supporting local economic growth.
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Investment Banking: In this segment, the bank offers services related to capital markets, including underwriting, equity issuance, debt issuance, and advisory services for mergers and acquisitions. This segment aims to assist companies in raising capital and managing financial risks.
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Wealth Management: This segment focuses on serving high-net-worth individuals and institutional clients, offering customized investment solutions, asset management services, and financial planning. The goal is to help clients grow and protect their wealth while also providing investment products.
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Treasury Operations: The treasury segment is essential for managing the bank’s liquidity, funding, and interest rate risks. It involves activities like money market operations, foreign exchange trading, and investment in securities.
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Financial Technology and Digital Banking: As part of its growth strategy, Bank of Chengdu has been investing in technology to enhance its digital banking platform. This includes mobile banking services, online investment products, and other tech-driven financial services that cater to the increasing demand for digital access among customers.
These segments collectively support the bank's overarching mission of providing comprehensive financial services while ensuring profitability and sustainability in a competitive banking landscape.
Bank of Chengdu Co., Ltd. holds several unique competitive advantages that can set it apart from its rivals in the banking sector, particularly within China:
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Regional Focus and Expertise: The Bank of Chengdu has a strong emphasis on the Sichuan province and the surrounding regions. This localized focus allows the bank to develop a deep understanding of the local economy, businesses, and customer needs, enabling it to tailor services and products effectively.
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Government Support: As a bank that operates within a strategic region of China, it may benefit from favorable policies and support from local government initiatives aimed at economic development. This can translate into better access to funding and government contracts.
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Strong Customer Relationships: With its regional focus, the bank is likely to have established strong relationships with local businesses and individuals. Long-standing relationships can lead to customer loyalty and increased business through referrals and repeat clients.
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Service Diversification: Bank of Chengdu may offer a range of financial services beyond traditional banking, such as wealth management, investment banking, and insurance, allowing it to capture more market share and meet varied customer needs.
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Innovative Technology Adoption: The bank may invest in advancements in technology such as fintech solutions, mobile banking apps, and online platforms that cater to the evolving needs of customers, enhancing user experience and operational efficiency.
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Cost Efficiency: Being a regional bank may afford the Bank of Chengdu a cost advantage as it focuses on specific markets, potentially leading to lower operational expenses compared to larger, more sprawling banks.
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Community Engagement: A commitment to corporate social responsibility and community involvement can enhance its reputation and brand loyalty, distinguishing it from competitors focused solely on profitability.
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Regulatory Compliance and Risk Management: A solid understanding of local regulations and dedicated efforts in risk management can provide a competitive edge, especially in a landscape where regulatory changes are frequent.
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Growth Potential in Underserved Markets: As cities in China develop, there are often underserved markets that present growth opportunities. The Bank of Chengdu’s focus on local development can position it favorably to capitalize on this potential growth.
In summary, the Bank of Chengdu Co., Ltd. can leverage its regional expertise, government relationships, customer loyalty, and technology investments to maintain a competitive edge over its rivals.
Bank of Chengdu Co., Ltd., like many regional banks, faces several risks and challenges in the near future. Here are some of the key factors to consider:
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Economic Conditions: The overall economic environment in China can significantly affect the bank's performance. Slowdowns in economic growth, trade tensions, or global economic uncertainties can impact loan demand and increase default rates.
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Regulatory Changes: The banking sector in China is subject to strict regulations. Any changes in policies, such as capital requirements or lending controls, can impact the bank’s operations and profitability.
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Credit Risk: As a regional bank, Bank of Chengdu may have a concentrated loan portfolio, increasing its exposure to specific sectors like real estate or manufacturing. Downturns in these sectors could lead to higher non-performing loans.
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Liquidity Risk: Maintaining adequate liquidity is crucial for banks. Economic stress or unexpected withdrawals could pose liquidity challenges, especially if the bank has a high dependence on short-term funding.
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Competition: Increased competition from both domestic and international banks, as well as non-bank financial institutions, can pressure margins and lead to aggressive lending practices.
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Technological Disruption: The rise of fintech and digital banking presents both opportunities and challenges. The bank needs to continuously innovate and upgrade its technology to meet customer expectations and compete with agile fintech companies.
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Pandemic and Health Risks: While the immediate pandemic effects may be receding, potential future health crises can still disrupt operations and affect the economic environment.
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Geopolitical Risks: Political tensions or instability can impact market confidence and economic conditions, which in turn affects the banking sector.
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Foreign Exchange Risk: As globalization continues, fluctuations in currency values may affect the bank’s international transactions and investments.
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Reputation Risk: Any controversies or compliance issues can harm the bank's reputation, affecting customer trust and loyalty.
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Interest Rate Risks: Changes in interest rates could impact the bank’s net interest margin, affecting profitability.
Overall, Bank of Chengdu needs to navigate this complex landscape through prudent risk management, diversification of its loan portfolio, investment in technology, and maintaining regulatory compliance.
Balance Sheet Decomposition
Bank of Chengdu Co Ltd
Net Loans | 698.6B |
Investments | 410.7B |
PP&E | 2.2B |
Intangibles | 17.9m |
Other Assets | 110.1B |
Total Deposits | 889.4B |
Short Term Debt | 32.2B |
Long Term Debt | 214.9B |
Other Liabilities | 8.1B |
Wall St
Price Targets
Price Targets Summary
Bank of Chengdu Co Ltd
According to Wall Street analysts, the average 1-year price target for Bank of Chengdu Co Ltd is 17.6 CNY with a low forecast of 13.03 CNY and a high forecast of 22.25 CNY.
Dividends
Current shareholder yield for Bank of Chengdu 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?
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Description
Bank of Chengdu Co., Ltd. engages in the provision of commercial banking services. The company is headquartered in Chengdu, Sichuan and currently employs 6,913 full-time employees. The company went IPO on 2018-01-31. The Bank's principal businesses include corporate banking, personal banking and treasury businesses, among others. The corporate banking businesses mainly include corporate loans, discounted bills, corporate deposits and products and services that charge for handling fees and commissions.The personal banking businesses mainly include personal loans, personal deposits, bank cards and products and services that charge for handling fees and commissions. The treasury businesses include money market business, portfolio management business, interbank market business and valet funds trading business.
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The intrinsic value of one Bank of Chengdu Co Ltd stock under the Base Case scenario is 57.36 CNY.
Compared to the current market price of 15.36 CNY, Bank of Chengdu Co Ltd is Undervalued by 73%.