BANK OF SUZHOU(SZ:002966) Huachuang Securities·2025-08-29 02:47Investment Rating - The report maintains a "Recommendation" rating for Suzhou Bank, with a target price of 9.64 CNY [2][9]. Core Views - Suzhou Bank's revenue has accelerated year-on-year, with a 1H25 revenue of 6.504 billion CNY, up 1.81% YoY, and a net profit attributable to shareholders of 3.134 billion CNY, up 6.15% YoY. The non-performing loan ratio remains stable at 0.83%, while the provision coverage ratio has decreased by 9 percentage points to 438% [2][9]. - The bank is experiencing balanced growth in volume, price, and quality, with a notable increase in net interest income and a reduction in the decline of non-interest income [9]. - The bank's asset quality remains stable, with a strong risk buffer, and it is expected to achieve revenue growth rates of 1.6%, 8.2%, and 9.4% for 2025-2027, respectively [9][10]. Financial Performance Summary - 1H25 net interest income growth accelerated, with a 2Q25 revenue growth rate of +2.88%, up 2.1 percentage points from the previous quarter. The net interest income growth rate for the quarter increased by 6.7 percentage points to 6.2% [9]. - The bank's cost control measures have been effective, with a year-on-year decrease in business and management expenses by 9.4% and a cost-to-income ratio down 3.7 percentage points to 30.5% [9]. - The bank's total assets are projected to grow from 693.714 billion CNY in 2024 to 973.864 billion CNY in 2027, with total loans expected to increase from 333.359 billion CNY to 485.183 billion CNY over the same period [11][14]. Asset Quality and Risk Management - The non-performing loan ratio remains stable at 0.83%, with a decrease in the annualized net non-performing loan generation rate to 0.54%. The bank has increased provisions for non-credit assets, leading to a decrease in the provision coverage ratio [9][12]. - The bank's retail loan non-performing rate has increased, particularly in personal operating loans and mortgage loans, but overall asset quality is considered stable [9][12]. Investment Recommendations - Given the stable asset quality, sufficient provision buffer, and expected revenue growth, the report suggests that Suzhou Bank is well-positioned for future expansion, especially as economic activity rebounds [9][10].