Loading..

Bank of Chengdu Co., Ltd. (601838) Report Analysis

Corporate Events

Neutral

Bank of Chengdu Co., Ltd., Q1 2022 Earnings Cal...

2022-05-06 04:45:00

Bank of Chengdu Co., Ltd., Q1 2022 Earnings Call, May 10, 2022

Neutral

Bank of Chengdu Co., Ltd., Q1 2022 Earnings Call, May 10, 2022

2022-05-06 04:45:00

Bank of Chengdu Co., Ltd., Q1 2022 Earnings Call, May 10, 2022

Fundamental Summary

Bank of Chengdu's Q1 results, which were published on 2022-04-27, contained several weak and problematic metrics. Individually, while its growth and income factors look unhealthy, the holistic financial picture that includes growth factors painted a picture that looks more encouraging. In statistics, this is called the Simpson Paradox (https://www.britannica.com/topic/Simpsons-paradox). Thus, Bank of Chengdu received an overall score of 79, which translates to a BUY recommendation.

Bank of Chengdu reported earnings results for the first quarter ended March 31, 2022. For the first quarter, the company reported net interest income was CNY 3,840.97 million compared to CNY 3,215.97 million a year ago. Net income was CNY 2,150.53 million compared to CNY 1,669.31 million a year ago. Basic earnings per share from continuing operations was CNY 0.6 compared to CNY 0.46 a year ago. Diluted earnings per share from continuing operations was CNY 0.57 compared to CNY 0.46 a year ago.

Business Description

Bank of Chengdu provides various commercial banking products and services in China. It offers personal and corporate deposits, personal and corporate loans, personal finance, trade chain financing, credit cards, guarantee, foreign exchange, and insurance services. The company was formerly known as Chengdu City Commercial Bank Co., Ltd. and changed its name to Bank of Chengdu in August 2008. Bank of Chengdu was founded in 1996 and is based in Chengdu, China.

Sector Overview

Bank of Chengdu is included in the Banks according to GICS (global industry classification standard). The Banks industry, which is in the Financials sector, includes Diversified & Regional Banks whose operations focus on conventional banking, retail banking, and lending to SMEs (small and medium enterprises). Bank of Chengdu's industry and sector affiliation are expected to negatively affect their likelihood to overperform the market in the upcoming period, as other sectors appear more likely to benefit from the macroeconomic environment we see now.

Fundamental Highlights


Parameter Value Change Score
Assets 837,798.5 12.2% 76
Liabilities 783,112.7 12.4% 83
Price to Book 1.0 16.6% 83
Cash & Equivalents 54,240.9 38.1% 82
Equity 54,603.5 10.2% 68
Total Revenues 13,853.7 16.5% 44
Parameter Value Change Score
Return on Equity 16.2 2.4% 75
Net Cashflow 14,845.7 168.5% 66
Capital Expenditure -145.2 -39.6% 45
Free Cashflow -0.8 -160.8% 67

* All values are TTM

The below chart reflects Bank of Chengdu's birds-eye view on its performance with respect to its peers, the company's fillings as reported or to a similar industry, market cap, and country of origin. While Bank of Chengdu's peer average final assessment score stands on 75.0, Bank of Chengdu's score is 79.

  •  601838
  •  Peers average
Name Market Cap Balance Sheet Income Statement Cash Flow Rating Final Assessment mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 77 63 68
Hold
73
73 0 1
Industrial Bank Co., Ltd. 402.2B 85 67 66
Buy
80
80 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 72 61 68
Hold
68
68 2 1
China Everbright Bank Company Limited 160.4B 76 63 56
Hold
70
70 3 1
China Minsheng Banking Corp., Ltd. 150.8B 81 62 79
Hold
78
78 4 1
Bank of Nanjing Co., Ltd. 111.2B 82 66 54
Hold
74
74 5 1
Bank of Jiangsu Co., Ltd. 100.3B 83 71 84
Buy
86
86 6 1
Bank of Beijing Co., Ltd. 95.8B 84 59 75
Hold
77
77 7 1
Bank of Shanghai Co., Ltd. 92.8B 90 64 81
Buy
85
85 8 1
Bank of Hangzhou Co., Ltd. 85.0B 81 70 69
Buy
80
80 9 1
Hua Xia Bank Co., Limited 79.1B 81 63 75
Hold
77
77 10 1
Bank of Changsha Co., Ltd. 31.4B 79 62 60
Hold
72
72 11 1
QILU BANK CO., LTD. 22.4B 93 69 80
Strong Buy
91
91 12 1
Bank of Guiyang Co.,Ltd. 21.2B 80 62 75
Hold
77
77 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 82 71 80
Buy
84
84 14 1
Bank of Xi'an Co.,Ltd. 16.2B 80 56 51
Hold
70
70 15 1
Xiamen Bank Co., Ltd. 15.6B 83 62 82
Buy
80
80 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 83 70 69
Buy
81
81 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 77 60 53
Hold
70
70 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 73 64 79
Hold
73
73 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 74 73 70
Hold
76
76 20 1
Ping An Bank Co., Ltd. 281.2B 83 72 85
Strong Buy
87
87 21 1
Bank of Ningbo Co., Ltd. 225.7B 89 70 71
Buy
86
86 22 1
Bank of Suzhou Co., Ltd. 22.1B 92 60 61
Buy
80
80 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 74 61 81
Hold
73
73 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 77 71 64
Hold
76
76 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 77 70 53
Hold
72
72 26 1

Technical Analysis

When trying to optimize the timing of an investment, it's critical to analyze whether the stock looks overbought or oversold, and in which direction the momentum is moving. Bank of Chengdu's stock is now priced above its 50-day and 200-day, but below its 5-day moving average, while its MACD (moving average convergence divergence) indicates that the stock's price movement momentum is strengthening. Historically, this is a positive setup in the medium and long-term. In particular, many institutional investors keep close watch of the 200-day moving average. Meanwhile, looking at the Stochastic Oscillator and RSI (relative strength index), Bank of Chengdu's stock indicates that it's likely oversold. Overall, these technical indicators signal positive upward momentum. Therefore, this stock received a cumulative TA (technical analysis) score of 73.

Bullish 73
Close Price 16.61
52W Low 10.48
52W High 17.47
5D MA 16.67
50D MA 16.25
200D MA 13.88
MACD 0.2
RSI 18.76
STOCH 23.21

Balance Sheet Analysis

Bank of Chengdu appears likely to maintain its strong balance sheet metrics and momentum going forward. Bank of Chengdu has done an excellent job managing its liabilities. Bank of Chengdu's liabilities stood at 783112.7 in the current filing, which represents a 12.4% change from the previous report. This performance is all interesting relative to their peers and suggests that their stock price has room to grow to reflect a higher intrinsic value. Therefore, we rated their liabilities movement with a score of 83. Also, Bank of Chengdu publishes solid book value factor metrics in this report. Price to book ratio (P/B) now sits at 1.0 and represents a 16.6% change from the previous report. The company's book value factor metrics are even more remarkable when compared to their peers. Therefore, its book value factors earned a score of 83. On the other hand, Equity, jumped out as looking problematic. Bank of Chengdu reported weak equity changes momentum this period. At filing, equity was reported as 54603.5, representing 10.2% change from the previous report. This parameter often affects companies in the same industry and market capitalization by up to 7.1%. This performance is significantly less impressive than its peers and competitors. Therefore, their equity movement component earned a score of 68. Therefore, we scored its balance sheet a 86.

Parameter Value Change Score
Assets 837,798.5 12.2% 76
Liabilities 783,112.7 12.4% 83
Price to Book 1.0 16.6% 83
Cash & Equivalents 54,240.9 38.1% 82
Equity 54,603.5 10.2% 68
* All values are TTM

The below chart describes Bank of Chengdu's performance as reflected on its balance sheet with respect to its peers. While Bank of Chengdu received a balance sheet score of 86, the average of its peers stands on 77.0.

  •  601838
  •  Peers average
Name Market Cap Liabilities Movement Asset Change Equity/Intangibles Adjustments Cash & Equivalents Book Value Momentum Balance Sheet mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 72 81 68 37 84 77 0 1
Industrial Bank Co., Ltd. 402.2B 74 80 68 90 82 85 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 74 70 55 51 76 72 2 1
China Everbright Bank Company Limited 160.4B 89 44 69 54 76 76 3 1
China Minsheng Banking Corp., Ltd. 150.8B 80 45 69 90 77 81 4 1
Bank of Nanjing Co., Ltd. 111.2B 81 51 51 89 82 82 5 1
Bank of Jiangsu Co., Ltd. 100.3B 87 85 55 92 78 83 6 1
Bank of Beijing Co., Ltd. 95.8B 64 63 68 67 90 84 7 1
Bank of Shanghai Co., Ltd. 92.8B 83 62 54 90 90 90 8 1
Bank of Hangzhou Co., Ltd. 85.0B 82 63 54 87 79 81 9 1
Hua Xia Bank Co., Limited 79.1B 79 49 69 89 76 81 10 1
Bank of Changsha Co., Ltd. 31.4B 74 63 69 72 79 79 11 1
QILU BANK CO., LTD. 22.4B 80 59 95 77 89 93 12 1
Bank of Guiyang Co.,Ltd. 21.2B 74 61 69 77 80 80 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 85 81 69 60 81 82 14 1
Bank of Xi'an Co.,Ltd. 16.2B 81 55 67 97 75 80 15 1
Xiamen Bank Co., Ltd. 15.6B 86 66 69 84 78 83 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 83 72 69 81 79 83 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 41 80 56 95 80 77 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 66 72 55 62 78 73 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 78 77 55 60 75 74 20 1
Ping An Bank Co., Ltd. 281.2B 79 78 69 88 79 83 21 1
Bank of Ningbo Co., Ltd. 225.7B 86 51 68 97 84 89 22 1
Bank of Suzhou Co., Ltd. 22.1B 91 82 54 97 89 92 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 66 68 55 72 77 74 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 84 53 55 65 79 77 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 76 66 69 76 74 77 26 1

Income Statement Analysis

Bank of Chengdu appears likely to maintain its strong income statement metrics, especially Return Factors. In this filing, Bank of Chengdu reported a return on equity (ROE) ratio of 16.2, which represents a change of 2.4%. These numbers show that management has successfully encouraged growth while managing ROE and ROA metrics, especially relative to their peers. Consequently, their return factors received a grade of 75. That said, one metric, Revenue Efficiency, stood out as strongly negative. Bank of Chengdu's revenue efficiency metrics look especially concerning this period, highlighting issues management is having controlling and reducing expenses while increasing earnings. This metric might have a 2.3 percent impact on companies in the same industry and with the same market capitalization. Their revenue efficiency does not make a compelling case for upward pressure on the company's stock price. As a result, their revenue efficiency earned a score of 44. their income statement received an overall score of 68.

Parameter Value Change Score
Total Revenues 13,853.7 16.5% 44
Return on Equity 16.2 2.4% 75
* All values are TTM

The below chart describes Bank of Chengdu's performance as reflected on its income statement with respect to its peers. While Bank of Chengdu received a income statement score of 68 , the average of its peers stands on 70.0.

  •  601838
  •  Peers average
Name Market Cap Revenue Momentum Earning Movement Return Factors Momentum Income Statement mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 58 68 61 63 0 1
Industrial Bank Co., Ltd. 402.2B 48 67 73 67 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 80 67 54 61 2 1
China Everbright Bank Company Limited 160.4B 69 67 61 63 3 1
China Minsheng Banking Corp., Ltd. 150.8B 85 67 55 62 4 1
Bank of Nanjing Co., Ltd. 111.2B 48 65 74 66 5 1
Bank of Jiangsu Co., Ltd. 100.3B 48 69 80 71 6 1
Bank of Beijing Co., Ltd. 95.8B 63 68 50 59 7 1
Bank of Shanghai Co., Ltd. 92.8B 66 67 61 64 8 1
Bank of Hangzhou Co., Ltd. 85.0B 48 66 82 70 9 1
Hua Xia Bank Co., Limited 79.1B 61 67 61 63 10 1
Bank of Changsha Co., Ltd. 31.4B 57 68 58 62 11 1
QILU BANK CO., LTD. 22.4B 50 68 76 69 12 1
Bank of Guiyang Co.,Ltd. 21.2B 69 67 58 62 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 52 71 77 71 14 1
Bank of Xi'an Co.,Ltd. 16.2B 47 64 58 56 15 1
Xiamen Bank Co., Ltd. 15.6B 48 68 59 62 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 66 68 76 70 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 81 71 55 60 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 54 69 61 64 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 84 69 77 73 20 1
Ping An Bank Co., Ltd. 281.2B 53 68 81 72 21 1
Bank of Ningbo Co., Ltd. 225.7B 55 68 76 70 22 1
Bank of Suzhou Co., Ltd. 22.1B 53 66 58 60 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 62 67 57 61 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 64 67 79 71 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 51 68 77 70 26 1

Cash Flow Analysis

Bank of Chengdu's most recent cash flow report was not encouraging. Bank of Chengdu's management did not a remarkable job this period managing capital expenditures (CapEx). In terms of the raw numbers, CapEx was reported as -145.2, which represents a -39.6% change from the last period. This performance is all the more uninspiring relative to their peers and competitors. Consequently, their CapEx movement received a grade of 45. Also, Bank of Chengdu's produced underwhelming cash flow numbers in this filing. Net cash flow was reported as 14845.7, which is a 168.5% change from the last report. As demonstrated by these concerning net cash flow metrics, their priorities seem to be headed in the wrong direction. Its net cash flow, therefore, received a grade of 66. However, one encouraging metric, Free Cash flow, stood out. Free cash flow numbers published by Bank of Chengdu were -0.8, which was a -160.8% change from the previous filing. Companies in the same industry and market capitalization are typically affected by this parameter by up to 9.3%. Their free cash flow situation is all the more impressive relative to their peers and competitors. The company's free cash flow movement, therefore, received a grade of 67. Therefore, their cash flow earned a grade of 58.

Parameter Value Change Score
Net Cashflow 14,845.7 168.5% 66
Capital Expenditure -145.2 -39.6% 45
Free Cashflow -0.8 -160.8% 67
* All values are TTM

The below chart describes Bank of Chengdu's performance as reflected on its cash flow with respect to its peers. While Bank of Chengdu received a cash flow score of 58, the average of its peers stands on 68.0.

  •  601838
  •  Peers average
Name Market Cap Cashflow Momentum Free Cashflow Growth Capital Expenditure Growth Assets Factors Momentum Cash Flow mc_sort Hidden
China Merchants Bank Co., Ltd. 1.1T 90 45 44 69 68 0 1
Industrial Bank Co., Ltd. 402.2B 81 56 47 69 66 1 1
Shanghai Pudong Development Bank Co., Ltd. 233.9B 48 87 85 69 68 2 1
China Everbright Bank Company Limited 160.4B 43 95 54 69 56 3 1
China Minsheng Banking Corp., Ltd. 150.8B 84 45 91 69 79 4 1
Bank of Nanjing Co., Ltd. 111.2B 49 84 48 69 54 5 1
Bank of Jiangsu Co., Ltd. 100.3B 93 41 90 69 84 6 1
Bank of Beijing Co., Ltd. 95.8B 67 67 92 69 75 7 1
Bank of Shanghai Co., Ltd. 92.8B 95 38 80 69 81 8 1
Bank of Hangzhou Co., Ltd. 85.0B 49 87 90 69 69 9 1
Hua Xia Bank Co., Limited 79.1B 80 57 69 69 75 10 1
Bank of Changsha Co., Ltd. 31.4B 59 81 45 69 60 11 1
QILU BANK CO., LTD. 22.4B 81 54 90 69 80 12 1
Bank of Guiyang Co.,Ltd. 21.2B 67 67 90 69 75 13 1
Jiangsu Changshu Rural Commercial Bank Co., Ltd. 20.6B 71 73 81 69 80 14 1
Bank of Xi'an Co.,Ltd. 16.2B 43 90 62 67 51 15 1
Xiamen Bank Co., Ltd. 15.6B 93 40 85 69 82 16 1
Zhejiang Shaoxing RuiFeng Rural Commercial Bank Co.,Ltd 12.2B 96 37 44 69 69 17 1
Jiangsu Zijin Rural Commercial Bank Co.,Ltd 10.5B 46 99 50 67 53 18 1
Wuxi Rural Commercial Bank Co.,Ltd 10.3B 82 52 84 69 79 19 1
Jiangsu Suzhou Rural Commercial Bank Co., Ltd 9.0B 85 50 56 69 70 20 1
Ping An Bank Co., Ltd. 281.2B 91 42 96 69 85 21 1
Bank of Ningbo Co., Ltd. 225.7B 93 38 59 69 71 22 1
Bank of Suzhou Co., Ltd. 22.1B 61 78 49 69 61 23 1
Qingdao Rural Commercial Bank Co., Ltd. 18.4B 86 49 84 69 81 24 1
Jiangsu Zhangjiagang Rural Commercial Bank Co., Ltd 11.1B 39 98 84 69 64 25 1
Jiangsu Jiangyin Rural Commercial Bank Co.,LTD. 9.3B 42 94 51 69 53 26 1

This report is intended for general guidance and information purposes only and under no circumstances is tailored to a specific factor or variable related to its reader or intended to be used or considered as financial or investment advice, a solicitation of any offer, a recommendation, or an offer to sell or buy any securities or other form of a financial asset. For the full disclaimer, click here.