Suzhou Rural Commercial Bank(SH:603323)2024-08-31 03:30Investment Rating - The report initiates coverage with a "Buy" rating for the company, based on its fundamentals and stock price elasticity for the period 2024-2026 [1][33]. Core Insights - The company demonstrates steady revenue growth and improved profitability, achieving operating income of 2.276 billion yuan in H1 2024, a year-on-year increase of 8.59%, and a net profit attributable to shareholders of 1.12 billion yuan, up 15.64% year-on-year [4][8]. - The bank's return on equity (ROE) stands at 13.7%, reflecting a year-on-year increase of 0.52 percentage points [4][8]. - The bank's interest income decreased by 7.04% year-on-year to 1.432 billion yuan in H1 2024, primarily due to a decline in loan yield [10][20]. - The bank's non-interest income rose significantly by 51.97% year-on-year to 843 million yuan, driven by a 115.92% increase in investment income [20][27]. - The asset quality remains strong, with a non-performing loan (NPL) ratio of 0.91% and a provision coverage ratio of 442.87% as of June 2024 [27][29]. Summary by Sections Financial Performance - In H1 2024, the company achieved operating income of 2.276 billion yuan, a year-on-year growth of 8.59%, and a net profit of 1.12 billion yuan, reflecting a 15.64% increase [4][8]. - The annualized ROE is reported at 13.7%, up 0.52 percentage points from the previous year [4][8]. Loan and Deposit Growth - Total loans increased by 7.02% year-on-year, with corporate loans growing by 13.73% [10][20]. - The bank's deposit base grew by 8.09% year-on-year, with a notable increase in the proportion of time deposits, which rose to 67.32% [10][20]. Non-Interest Income and Investment Returns - Non-interest income reached 843 million yuan, up 51.97% year-on-year, with investment income contributing significantly to this growth [20][27]. - The bank's other non-interest income surged by 62.55% year-on-year, primarily due to high investment returns [20][27]. Asset Quality - The bank maintains a strong asset quality with a non-performing loan ratio of 0.91% and a provision coverage ratio of 442.87% as of June 2024 [27][29]. - The core tier 1 capital adequacy ratio is reported at 9.9%, reflecting a slight decrease [27][29]. Investment Recommendations - The company is positioned in the core area of the Yangtze River Delta, with a clear strategic plan to enhance its market presence and operational efficiency [33]. - The projected book value per share (BVPS) for 2024-2026 is 9.56 yuan, 10.57 yuan, and 11.74 yuan, respectively, with corresponding price-to-book (PB) ratios of 0.50X, 0.45X, and 0.40X [33].