Changshu Bank(601128) 光大证券·2024-08-21 02:37Investment Rating - The report maintains a "Buy" rating for Changshu Bank (601128.SH) [1] Core Views - Changshu Bank demonstrates strong resilience in revenue growth, with a 12% year-on-year increase in revenue and a 19.6% increase in net profit attributable to shareholders in the first half of 2024 [1][2] - The bank's net interest margin (NIM) is under pressure, narrowing to 2.79%, but effective cost control on deposits is being implemented [2] - Non-interest income has surged by 57%, contributing significantly to overall revenue [2] - The bank maintains a low non-performing loan (NPL) ratio of 0.76% and a strong risk coverage capability [3] - Capital adequacy ratios remain robust, with a core Tier 1 capital ratio of 9.92% [3] Summary by Sections Financial Performance - In H1 2024, Changshu Bank achieved revenue of 55 billion, a 12% increase year-on-year, and a net profit of 17.3 billion, up 19.6% [1] - The bank's return on average equity (ROAE) improved to 13.3%, an increase of 0.9 percentage points year-on-year [1] Revenue Composition - The growth in revenue is driven by net interest income and non-interest income, which increased by 6.1% and 56.6% respectively [1] - Non-interest income accounted for 16.4% of total revenue, with significant contributions from investment income [2] Asset Quality - As of Q2 2024, the NPL ratio stood at 0.76%, with a slight increase in overdue loans [3] - The bank's credit impairment losses for Q2 were 8.4 billion, reflecting a year-on-year decrease [3] Capital Adequacy - The capital adequacy ratios as of Q2 2024 are as follows: core Tier 1 capital ratio at 9.92%, Tier 1 capital ratio at 9.97%, and total capital ratio at 13.22% [3][9] - The bank has a strong internal capital generation capacity, supported by a projected increase in net profit for 2024-2026 [4] Earnings Forecast - The report revises the net profit forecast for 2024-2026 to 38.9 billion, 45 billion, and 50.8 billion respectively, with corresponding EPS estimates of 1.29, 1.49, and 1.68 [4][5]