BANK OF SUZHOU(SZ:002966)2024-10-09 06:07Investment Rating - The report maintains a "Buy" rating for Suzhou Bank, emphasizing confidence in its sustainable growth and long-term investment value [5][7]. Core Views - The first major shareholder, Guofa Group, increased its stake in Suzhou Bank, which is seen as a sign of confidence and may help the bank achieve a new round of valuation recovery [5]. - Suzhou Bank's current price-to-book ratio (PB) is approximately 0.73, indicating significant undervaluation compared to its peers [5]. - The bank has a strong performance outlook, with expected net profit growth rates of 10.3%, 10.4%, and 10.7% for 2024-2026 [7]. Financial Data Summary - Total operating income (in million yuan) is projected to grow from 11,762.96 in 2023 to 14,069.03 in 2026, with a compound annual growth rate (CAGR) of approximately 15% over the past five years [4]. - The net profit attributable to shareholders is expected to increase from 3,918.44 in 2023 to 6,202.66 in 2026, reflecting a strong growth trajectory [4]. - The bank's non-performing loan (NPL) ratio is forecasted to remain low, at 0.83% in 2024, contributing to its stable performance [4]. Market Position and Strategy - Suzhou Bank is positioned as one of the few city commercial banks with a non-performing loan ratio below 1% and a provision coverage ratio exceeding 4%, which provides a stable earnings growth outlook [5]. - The bank's expansion strategy focuses on high-quality assets in key regions, with over 80% of asset growth coming from Suzhou and its surrounding areas [10]. - The bank's loan growth rate is leading the industry, with a nearly 15% increase in the second quarter of 2024 [5][10].