[ET Net News Agency, 6 April 2020] Jefferies Research initiated coverage on Chongqing
Rural Commercial Bank (CQRC)(03618) with a "hold" rating and a target price of HK$3.42.
The research house said, trading at 0.34x 2020 P/B and 48% discount to its A-share,
CQRC's H-share has already priced in a regional financial crisis and much higher than
national banks' NPL (non-performing loan) ratio, considering 12% ROE (return on equity).
Chongqing province's economic outlook is largely uncertain given the significant hit to
its mainstay industries - auto and electronics manufacturing. But the local government
took great efforts to resume production and boost the economy, and CQRCB looks well
prepared, given its strong provisioning and capital and best corporate governance and NPL
recognition among HK-listed municipal banks. (KL)