Chongqing Rural Commercial Bank (SEHK:3618): Recent Earnings Fuel a Fresh Look at Its Current Valuation

Chongqing Rural Commercial Bank (SEHK:3618) posted its latest earnings for the third quarter and nine months ended September 2025. The results showed higher net interest income and a marginal uptick in net profit year over year.

See our latest analysis for Chongqing Rural Commercial Bank.

Chongqing Rural Commercial Bank’s latest quarter appears to have put a spotlight on the stock, as investor interest has picked up alongside a 1-month share price return of 12% and a striking 1-year total shareholder return of 61%. With the stock sitting near its recent highs, momentum seems to be building behind the bank. This reflects growing confidence in its sustained earnings growth and financial resilience.

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After a stretch of strong returns and steady earnings growth, the question remains: is Chongqing Rural Commercial Bank still trading below its true value, or is the market now fully pricing in its future prospects?

Price-to-Earnings of 5.8x: Is it justified?

Chongqing Rural Commercial Bank trades at a price-to-earnings ratio of 5.8x, slightly undercutting both its industry average and peer group. This positions the stock as good value relative to the sector based on recent financials and share price.

The price-to-earnings ratio reflects investor expectations about earnings growth and profitability. For a bank like Chongqing Rural Commercial Bank, this metric helps compare its valuation to both local and regional peers. This offers insight into how the market prices its current and future potential.

Chongqing Rural Commercial Bank's P/E is not only below the peer average (6.6x) but is also in line with the Hong Kong Banks industry average (5.8x). Furthermore, it compares favorably to its estimated fair price-to-earnings ratio of 6.4x. This implies investors could be undervaluing the bank’s earnings outlook, leaving room for the market to re-rate the stock toward the fair ratio as confidence increases.

Explore the SWS fair ratio for Chongqing Rural Commercial Bank

Result: Price-to-Earnings of 5.8x (UNDERVALUED)

However, market sentiment could shift if revenue growth slows or if the bank’s earnings face unexpected pressure from economic or regulatory changes.

Find out about the key risks to this Chongqing Rural Commercial Bank narrative.

Another View: Discounted Cash Flow

While the price-to-earnings approach signals Chongqing Rural Commercial Bank could be a bargain, the SWS DCF model draws an even starker conclusion. According to this method, the stock is trading nearly 57% below its estimated fair value. This suggests a deep undervaluation.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Chongqing Rural Commercial Bank for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 840 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Chongqing Rural Commercial Bank Narrative

If our analysis does not quite fit your perspective or you want to dive deeper into the numbers yourself, why not build your own narrative in just a few minutes? Do it your way.

A great starting point for your Chongqing Rural Commercial Bank research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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