Financial Performance - The bank reported a total operating income of CNY 2,970,661, representing a year-on-year increase of 10.04%[4] - Net profit attributable to shareholders reached CNY 1,083,791, up 13.81% compared to the same period last year[4] - Total profit for Q1 2025 reached CNY 1,377,690 thousand, a 12.2% increase from CNY 1,227,311 thousand in Q1 2024[27] - Net profit attributable to shareholders of the parent company was CNY 1,083,791 thousand, up 13.8% from CNY 952,266 thousand in the previous year[27] - The bank's basic earnings per share increased to CNY 0.36, a rise of 12.50% year-on-year[4] - The basic earnings per share for Q1 2025 was CNY 0.36, compared to CNY 0.32 in Q1 2024, reflecting a growth of 12.5%[27] Asset and Liability Management - Total assets increased to CNY 389,015,217, reflecting a growth of 6.12% from the end of the previous year[4] - Total liabilities increased to CNY 357,373,140 thousand from CNY 335,913,331 thousand, reflecting a rise of about 6.4%[24] - The total equity attributable to shareholders rose to CNY 29,564,295 thousand, up from CNY 28,647,828 thousand, indicating an increase of approximately 3.2%[25] - Cash and deposits with the central bank decreased to CNY 20,642,360 thousand from CNY 23,631,074 thousand, a decline of approximately 12.6%[24] Cash Flow and Liquidity - The net cash flow from operating activities decreased by 21.72%, totaling CNY 13,188,242[4] - The net cash flow from operating activities was CNY 13,188,242 thousand, a decrease of 21.5% from CNY 16,847,220 thousand in Q1 2024[30] - Cash and cash equivalents at the end of Q1 2025 totaled CNY 19,169,739 thousand, an increase from CNY 13,428,969 thousand in Q1 2024[30] - Investment activities resulted in a net cash outflow of CNY 9,186,317 thousand, an improvement from a net outflow of CNY 12,159,642 thousand in Q1 2024[30] - The bank's liquidity coverage ratio was reported at 220.28%, indicating strong liquidity management[18] Loan and Deposit Metrics - The loan-to-deposit ratio stood at 71.33%, with loans under CNY 10 million amounting to CNY 178,070 million[9] - The bank's loan and advance issuance amounted to CNY 241,312,765 thousand, compared to CNY 232,489,390 thousand in the previous period, marking a growth of about 3.5%[24] - The bank's total deposits increased to CNY 316,691,902 thousand from CNY 294,965,058 thousand, reflecting a growth of about 7.4%[24] Non-Performing Loans and Risk Management - The non-performing loan ratio slightly improved to 0.76% from 0.77% at the end of the previous year[12] - Core Tier 1 capital adequacy ratio decreased to 10.78% from 11.18% at the end of the previous year[15] Income Sources - The bank's commission income surged by 67.10%, reaching CNY 117,075, driven by increased fees from precious metals and insurance[8] - Net interest income rose to CNY 2,317,246 thousand, up from CNY 2,296,382 thousand, reflecting a growth of 0.87%[26] - Net fee and commission income significantly increased to CNY 70,826 thousand, compared to CNY 11,899 thousand, marking a growth of 495.4%[26] Shareholder Information - The number of shares held by the top 10 shareholders accounted for 27.18% of total shares, with the largest shareholder holding 9.01%[21] - The bank engaged with 152 institutional investors across 16 meetings during the reporting period, indicating active investor relations[22] Other Comprehensive Income - The bank's other comprehensive income decreased to CNY 624,612 thousand from CNY 790,834 thousand, a decline of approximately 21%[25] Comparative Performance - Total operating income for Q1 2025 was CNY 2,970,661 thousand, an increase of 10.03% compared to CNY 2,699,689 thousand in Q1 2024[26]

国浩律师（苏州）事务所 关于 江苏常熟农村商业银行股份有限公司 2024 年年度股东大会 之 见证法律意见书 苏州工业园区旺墩路 269 号圆融星座商务广场 1 幢 28 楼（215000） 电话：（+86）（512）62720177 传真：（+86）（512）62720199 www.grandall.com.cn 网址/Website：http：//www.grandall.com.cn 2025 年 4 月 国浩律师（苏州）事务所 本所律师按照有关法律法规的规定对公司2024年年度股东大会召集、召开程序是否合 法及是否符合《公司章程》、出席会议人员资格的合法有效性和股东大会表决程序的合法 有效性发表法律意见。法律意见书中不存在虚假、严重误导性陈述及重大遗漏，否则愿意 承担相应的法律责任。 本所律师是根据对事实的了解和对法律的理解发表法律意见。 本法律意见书依据国家有关法律法规的规定而出具。 本所律师同意将本法律意见书作为公司2024年年度股东大会的必备文件公告，并依法 对本所出具的法律意见承担责任。 本所律师已经对与出具法律意见书有关的所有文件材料及证言进行审查判断，并据此 出具法律意见如下： 一、本次 ...

Core Insights - Changshu Bank (601128) reported a revenue of 2.971 billion yuan for Q1 2025, representing a year-on-year growth of 10.04% [1] - The net profit for the same period was 1.084 billion yuan, showing a year-on-year increase of 13.81% [1] Financial Performance - Revenue for Q1 2025: 2.971 billion yuan, up 10.04% year-on-year [1] - Net profit for Q1 2025: 1.084 billion yuan, up 13.81% year-on-year [1]

Group 1 - Since April, 9 bank stocks have reached historical highs, indicating a sustained increase in industry interest [1][2] - In Q4 2024, bank performance has significantly improved, with many banks reporting positive results in Q1 of this year [1][5] - The total cash dividends for the banking sector are expected to reach a new high, with 12 bank stocks each exceeding 10 billion yuan in annual dividends [1][7] Group 2 - On April 24, the banking index closed up 1.16%, with major banks like Bank of China, Agricultural Bank of China, and Industrial and Commercial Bank of China hitting record highs [2] - The stock prices of major banks have steadily increased this year, with Shanghai Bank showing a year-to-date increase of 15.52% [2] - The banking sector is favored as a low-valuation, high-dividend defensive asset amid ongoing market fluctuations [3] Group 3 - Over 90% of the 36 bank stocks that have released their 2024 annual reports or performance forecasts reported year-on-year profit growth [5] - Shanghai Pudong Development Bank reported the highest year-on-year profit growth at 23.31%, driven by rapid credit growth and improved asset quality [5] - The total net profit of the disclosed bank stocks in Q4 2024 exceeded 480 billion yuan, marking a 5.66% increase from the previous year [5] Group 4 - Five bank stocks have released Q1 2025 performance reports, with several banks reporting year-on-year profit growth [6] - Major banks have indicated ongoing improvements in their asset-liability structures and operational efficiency [6] Group 5 - As of April 24, 29 bank stocks have announced dividend plans, with a total cash dividend amounting to 357.84 billion yuan [7] - The cumulative cash dividends for the banking sector in 2024 have reached 616.13 billion yuan, surpassing the previous year's total [8] - Industrial and Commercial Bank of China announced a cash dividend of 1.646 yuan per 10 shares, totaling 58.66 billion yuan, marking a continuous growth for nine years [8]

Group 1 - The banking sector has seen 9 stocks reach historical highs this month, including major state-owned banks like ICBC, ABC, and CCB, with significant year-to-date gains [2][4] - The banking sector index rose by 1.16% on April 24, outperforming the market, with notable increases in stock prices for major banks [2][3] - The overall performance of the banking sector improved significantly in Q4 of the previous year, with 33 out of 36 banks reporting year-on-year profit growth [4][5] Group 2 - The total cash dividends announced by banks for 2024 have reached a record high of 6,161.26 billion yuan, surpassing the previous year's total [6][7] - Major banks like ICBC, CCB, and ABC have declared dividends exceeding 500 billion yuan, contributing to the sector's reputation for high dividends [6][7] - Ningbo Bank reported the highest year-on-year increase in dividends at 50%, indicating a strong commitment to shareholder returns [7]

Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 8.82 CNY per share based on a 20% valuation premium over the average PB of comparable companies [4][7]. Core Insights - The company is positioned as a leading small and micro enterprise bank, benefiting from a strong local economy and a well-established business model that emphasizes small loans and digital transformation [11][21]. - The bank's return on equity (ROE) is expected to maintain a leading position, with projections indicating a steady increase in profitability [11][4]. - The bank's asset quality is resilient across economic cycles, supported by favorable policies for small and micro enterprises, ensuring controllable credit costs [3][4]. Summary by Sections Company Overview - Established in 2001, the company has grown to a total asset size of 366.6 billion CNY by the end of 2024, marking a 9.6% year-on-year increase [26]. - The bank has a strong focus on small and micro enterprises, with a significant portion of its business dedicated to this segment [38]. Business Expansion - The bank has strategically expanded its presence beyond its home market, with 35.9% of its branches located outside its primary area, and it controls 34 village banks across multiple provinces [30][32]. - Revenue contributions from these branches and village banks have increased, with the share of revenue from outside the home region rising significantly [32]. Financial Performance - The bank's projected net profit growth rates for 2025, 2026, and 2027 are 12.8%, 11.2%, and 13.1%, respectively, with corresponding BVPS of 10.52, 11.92, and 13.51 CNY [4][6]. - The bank's net interest margin is expected to remain favorable due to a strategy focused on small loans and high-interest deposits maturing [3][4]. Risk Management - The bank's credit quality is expected to remain superior to its peers, with a non-performing loan ratio consistently below industry averages, supported by robust risk control measures [3][4]. - The bank maintains a provision coverage ratio above 500%, indicating strong preparedness for potential credit losses [3].

Investment Rating - The report gives a "Buy" rating for the company, with a target price of 8.82 CNY per share based on a 20% valuation premium over the average PB of comparable companies [4][7]. Core Viewpoints - The company is positioned as a leading small and micro enterprise bank, with a strong focus on local economic development and a well-established business model that has evolved through three iterations [11][38]. - The bank's asset quality is expected to remain stable, with credit costs projected to stay at controllable levels due to effective risk management and supportive policies for small and micro enterprises [3][53]. - The bank's return on equity (ROE) is anticipated to maintain a leading position in the industry, supported by robust fundamentals and a favorable growth outlook [11][4]. Summary by Sections Company Overview - Jiangsu Changshu Rural Commercial Bank, established in 2001, has a total asset scale of 366.6 billion CNY as of the end of 2024, showing a year-on-year growth of 9.6% [26][30]. - The bank has a diversified ownership structure, with the largest shareholder being Bank of Communications, holding 9.01% of shares [35][36]. Business Model and Strategy - The bank has developed a unique "Changshu Microfinance Model" through the introduction of IPC technology for credit assessment and the establishment of a "credit factory" model to enhance lending efficiency [44][45]. - The bank's personal operating loans accounted for approximately 40% of total loans as of mid-2024, leading the industry by over 10 percentage points [40][43]. Financial Performance - The bank's projected net profit growth rates for 2025, 2026, and 2027 are 12.8%, 11.2%, and 13.1%, respectively, with corresponding BVPS of 10.52, 11.92, and 13.51 CNY [4][6]. - The bank's net interest margin is expected to remain favorable due to a strategy of focusing on small, scattered, and credit-based lending, combined with the maturity of high-interest deposits [3][4]. Market Position and Expansion - The bank has a strong presence in the local market and is actively expanding its footprint through the establishment of branches and the acquisition of village banks, enhancing its revenue contribution from these areas [30][32]. - The bank's revenue from non-local branches and village banks has increased significantly, indicating a successful diversification strategy [32][33].

Core Insights - The Social Security Fund has disclosed its stock holdings as of the end of Q4 last year, appearing in the top ten shareholders of 328 companies, with a total holding of 7.052 billion shares valued at 109.87 billion yuan [1][2] Group 1: Stock Holdings - The Social Security Fund has newly entered 85 stocks and increased holdings in 99 stocks, while maintaining positions in 71 stocks and reducing holdings in 73 stocks [1] - Among the top holdings, Changshu Bank has the highest shareholding ratio at 8.90%, followed by Dengkang Oral Care at 6.78% [1][2] - A total of 14 stocks have over 100 million shares held by the Social Security Fund, with Changshu Bank leading at 268 million shares [1] Group 2: Performance Metrics - In terms of performance, 197 companies held by the Social Security Fund reported year-on-year net profit growth, with Guangxi Energy showing the highest increase of 3704.04% [2] - The average increase of stocks held by the Social Security Fund this year is 1.22%, outperforming the Shanghai Composite Index [2] - The best-performing stock is Shuanglin Shares, with a cumulative increase of 157.49%, while the largest decline is seen in Shanghai Ailuo, down 38.17% [2] Group 3: Sector Distribution - The stocks held by the Social Security Fund are primarily concentrated in the pharmaceutical, basic chemicals, and machinery equipment sectors, with 36, 27, and 27 stocks respectively [2] - The distribution of holdings includes 238 stocks from the main board, 56 from the ChiNext, and 34 from the Sci-Tech Innovation Board [2]

Core Viewpoint - The financial indicators and asset quality of the six disclosed banks are generally stable in the first quarter, with a positive outlook for the banking sector driven by increased market volatility and the sector's stable returns and index weight advantages [1][9]. Summary by Sections Financial Performance - Six listed banks have disclosed their Q1 2025 performance, showing overall stability but continued differentiation in earnings. For instance, Minsheng Bank reported a net interest margin improvement and a revenue increase of over 7% year-on-year, while Ping An, Chongqing Rural Commercial Bank, and Changshu Bank reported revenue changes of -13.05%, +1.35%, and +10.05% respectively [2]. - The divergence in earnings performance is attributed to the impact of last year's net interest margin decline and the effects of fair value changes in Q1 [2]. Credit Growth - The banks demonstrated strong expansion momentum, with Shanghai Pudong Development Bank's total loans increasing by 254.58 billion (5.02%) year-on-year, marking a recent quarterly high. Minsheng Bank also reported stable growth in deposits and loans, while Ping An Bank's loans grew by 1.1% [3]. - Overall, the credit growth and expansion are positive, aligning with marginal improvements in social financing growth, with significant focus on real credit issuance and investment in interest-bearing bonds [3]. Asset Quality - Asset quality remains stable, with non-performing loan ratios for Ping An, Chongqing Rural, and Changshu banks remaining flat or slightly improved. The provision coverage ratios for these banks are still at solid levels, indicating a cautious approach to provisioning [4]. - The banks are intensifying efforts to recognize and manage problem assets, particularly in retail lending, with future asset quality changes dependent on the recovery of household balance sheets [4]. Market Performance - The banking sector showed optimistic performance last week, with the A/H bank index rising by 4.23%, outperforming the broader market. Notable gainers included Chongqing Bank (8.8%) and Shanghai Pudong Development Bank (7.4%) [6]. - The influx of incremental funds into the banking sector is evident, with significant net inflows into stock ETFs and increased holdings by southbound funds in Hong Kong [7]. Investment Outlook - The banking sector is recommended for active allocation due to its defensive attributes and relative value, especially in the context of ongoing U.S.-China trade tensions. The sector is expected to maintain robust fundamentals compared to most industries [9]. - Specific stock recommendations focus on banks with stable profitability, attractive dividend yields, and potential for valuation recovery [9].

Core Viewpoint - Changshu Bank reported strong financial performance for Q1 2025, with double-digit growth in both operating income and net profit attributable to shareholders, but concerns arose regarding declining dividend rates and high executive compensation [1][2]. Financial Performance - In Q1 2025, Changshu Bank achieved operating income of 2.971 billion yuan, a year-on-year increase of 10.04% - The net profit attributable to shareholders reached 1.084 billion yuan, growing by 13.87% - The non-performing loan ratio decreased to 0.76%, with a high provision coverage ratio of 489.56% [1]. Dividend Policy - The bank's dividend payout ratio for 2024 was only 19.77%, marking a continuous decline over six years - Historical dividend payout ratios from 2018 to 2024 were 33.20%, 30.71%, 30.40%, 25.05%, 24.97%, 20.88%, and 19.77% respectively - The bank justified the low dividend ratio by emphasizing the need to retain profits for core tier one capital and regulatory capital adequacy requirements [2]. Executive Compensation - Executive compensation at Changshu Bank has been notably high, with the chairman's salary increasing from 1.6684 million yuan in 2022 to 1.8325 million yuan in 2024 - The president's salary also saw a significant rise from 150,000 yuan to over 1.8395 million yuan in the same period - Salaries for vice presidents ranged between 1.37 million yuan and 1.56 million yuan [3][4]. Internal Management Concerns - The bank was previously reported by the trading association for inadequate internal control in bond trading and excessive incentives for traders - This incident raised scrutiny over the bank's internal management and incentive mechanisms - In the context of many bank stocks trading below book value, the bank needs to balance shareholder returns with executive compensation and consider increasing dividend rates [5].