Changshu Bank(SH:601128) EBSCN·2024-03-04 16:00Investment Rating - The report maintains a "Buy" rating for Changshu Bank (601128.SH) with a current price of 6.92 CNY [1] Core Views - Changshu Bank reported a revenue of 9.87 billion CNY for 2023, representing a year-on-year growth of 12%, and a net profit attributable to shareholders of 3.28 billion CNY, up 19.6% year-on-year [3][4] - The bank's return on average equity (ROAE) stands at 13.69%, an increase of approximately 0.63 percentage points year-on-year [3] Revenue and Profitability - The bank's revenue and net profit growth rates for 2023 are 12% and 19.6% respectively, placing it among the top performers among banks that have released earnings reports [4] - In Q4 2023, the bank's revenue and net profit growth rates were 10.5% and 15% year-on-year, showing resilience despite a slight decline from previous quarters [4] Asset and Loan Growth - As of the end of 2023, Changshu Bank's total assets, loans, and non-loan assets grew by 16.2%, 15%, and 18.6% year-on-year respectively [5] - The bank's loan growth rate is expected to remain high at around 15% as it prepares for a strong start in 2024 [5] Deposit and Liability Management - Total liabilities and deposits grew by 16.5% and 16.2% year-on-year, with market liabilities increasing by 18.1% [5] - The bank's deposit-to-loan growth rate difference is 1.2 percentage points, indicating a healthy balance between deposits and loans [5] Interest Margin and Cost Control - The bank faces some pressure on its net interest margin (NIM) due to insufficient effective demand, but it is optimizing its loan structure to mitigate pricing pressures [5] - The bank has reduced deposit rates multiple times in 2023, which is expected to continue into 2024, helping to manage funding costs [5] Asset Quality - The non-performing loan (NPL) ratio remains low at 0.75%, unchanged from the previous quarter, indicating stable asset quality [6][7] - The provision coverage ratio is at 538%, reflecting strong risk mitigation capabilities [6][7] Earnings Forecast and Valuation - The bank's earnings per share (EPS) forecasts for 2023-2025 are 1.21, 1.43, and 1.67 CNY respectively, with corresponding price-to-book (PB) ratios of 0.75, 0.66, and 0.58 [7][8] - The current price-to-earnings (PE) ratios are projected to be 5.72, 4.83, and 4.15 for the same period [7][8]