BANK OF SUZHOU(SZ:002966) Shenwan Hongyuan Securities·2025-06-26 13:14Investment Rating - The report maintains a "Buy" rating for Suzhou Bank, with an adjusted target valuation set at 1 times PB for 2025 [8]. Core Views - The report emphasizes the strong regional presence, substantial provisions, and excellent performance characteristics of Suzhou Bank, highlighting the significant shareholding increase by the major shareholder, Guofa Group, as a key catalyst for investment [8]. - The report notes that Guofa Group has increased its stake to approximately 14.6% and has completed a share buyback plan exceeding the lower limit, indicating confidence in the bank's long-term growth potential [6][8]. - The expected improvement in mid-year revenue performance and the bank's ability to maintain a leading position in profit growth within the industry are also highlighted [8]. Financial Data and Profit Forecast - Total operating income is projected to grow from 11,866.12 million in 2023 to 14,377.10 million by 2027, with a compound annual growth rate (CAGR) of approximately 7.17% [7]. - The net profit attributable to shareholders is expected to increase from 4,600.65 million in 2023 to 6,353.92 million in 2027, reflecting a growth rate of 8.29% by 2027 [7]. - The report anticipates a decrease in asset impairment losses from 1,647.96 million in 2023 to 2,223.63 million by 2027, indicating improved asset quality [7]. - The non-performing loan (NPL) ratio is projected to remain stable at around 0.82% from 2025 to 2027, with a high provision coverage ratio of over 420% expected to be maintained [7][8]. Shareholder Activity - Guofa Group has increased its holdings in Suzhou Bank four times since September 2024, accumulating a total of 2.2 billion shares for nearly 17 billion, demonstrating strong confidence in the bank's future [9]. - Following the approval of shareholder qualifications, Guofa Group's maximum holding limit has increased to 20%, allowing for further potential share purchases [8][9]. Valuation Comparison - As of June 26, 2025, Suzhou Bank's closing price is 9.13 yuan, with a market capitalization of 40,071 million yuan and a price-to-book (P/B) ratio of 0.79, indicating an approximate 11% discount compared to comparable peers [8][13]. - The report suggests that the current stock price corresponds to a 2025 P/B of 0.79, with an expected dividend yield of around 4.0%, providing a potential upside of 27% [8].