BANK OF SUZHOU(SZ:002966) Orient Securities·2024-09-04 00:12Investment Rating - The report maintains a "Buy" rating for Suzhou Bank, with a target price of 7.98 CNY per share, based on a valuation of 0.68 times PB for 2024 [2][4]. Core Views - The performance growth of Suzhou Bank is steady, with a net profit growth of 12.1% year-on-year as of 24H1, positioning it among the top of listed city commercial banks [1]. - The bank's total assets and loan growth rates have slightly decreased, but corporate loans continue to grow rapidly, primarily driven by sectors such as government-related, real estate, and manufacturing [1]. - Asset quality pressures have increased marginally, but the provision coverage ratio remains high at 486.8% [1]. Summary by Sections Financial Performance - As of 24H1, Suzhou Bank's revenue, PPOP, and net profit attributable to shareholders grew by 1.9%, -0.6%, and 12.1% respectively compared to 24Q1 [1]. - Net interest income decreased by 3.0% year-on-year, while net fee income continued to show negative growth, albeit at a reduced rate of 19.9% [1]. - Other comprehensive income increased by 49.9% due to fair value changes in other debt investments [1]. Asset and Loan Growth - Total assets and loan growth rates fell to 13.7% and 14.5% respectively, with corporate loans maintaining a growth rate above 20% [1]. - The net interest margin narrowed by 4 basis points from 24Q1, with a decrease in the yield on interest-earning assets by 28 basis points compared to the previous year [1]. Asset Quality - The non-performing loan ratio stood at 0.84%, unchanged from 24Q1, while the attention rate increased to 0.88% [1]. - The provision coverage ratio decreased by 4.9 percentage points to 486.8%, indicating sufficient profit space to absorb potential losses [1]. Profit Forecast - The forecast for net profit growth for 2024, 2025, and 2026 is adjusted to 11.7%, 10.4%, and 10.2% respectively, with EPS projected at 1.37, 1.52, and 1.67 CNY [2].