Changshu Bank(601128) 民生证券·2024-08-21 04:07Investment Rating - The report maintains a "Recommended" rating for the company, with a target price corresponding to 0.7 times the 2024 PB based on the closing price on August 20, 2024 [1]. Core Views - The company has demonstrated stable revenue growth with a 12% year-over-year increase in revenue for the first half of 2024, and a 19.6% increase in net profit attributable to shareholders [1]. - The bank's non-performing loan ratio remains stable at 0.76%, with a provision coverage ratio of 539%, indicating strong risk management capabilities [1]. - The bank's net interest margin is resilient at 2.79%, with a slight decrease of 4 basis points from the previous quarter, reflecting effective cost management and competitive loan pricing [1]. Summary by Relevant Sections Revenue and Profitability - In H1 2024, the bank's revenue reached 5.5 billion, with a year-over-year growth of 12% [1]. - Net interest income grew by 6.1%, while non-interest income surged by 56.6%, primarily driven by investment income from trading financial assets [1]. - The bank's net profit attributable to shareholders was 1.7 billion, reflecting a 19.6% year-over-year increase [1]. Asset Quality - The non-performing loan ratio stood at 0.76%, unchanged from the previous quarter, with a provision coverage ratio of 539% [1]. - Forward-looking indicators such as the attention rate and overdue rate have shown slight increases compared to the end of 2023 [1]. Loan and Deposit Trends - Total assets, total loans, and total deposits increased by 15.6%, 11.3%, and 16.7% year-over-year, respectively [1]. - The bank's loan growth was driven by corporate loans, which increased by 14%, while personal loans grew by 6.9% [1]. - The proportion of time deposits rose to 72%, indicating a trend towards more stable funding sources [1]. Financial Projections - The bank's earnings per share (EPS) are projected to be 1.41, 1.65, and 1.91 yuan for 2024, 2025, and 2026, respectively [2]. - The price-to-earnings (PE) ratio is expected to decrease from 6 in 2024 to 4 by 2026, indicating potential undervaluation [2].