Wuxi Rural Commercial Bank(SH:600908) Haitong Securities·2024-04-01 16:00Investment Rating - The investment rating for Wuxi Bank is "Outperform the Market" [2][4]. Core Views - In 2023, Wuxi Bank's revenue grew by 1.28% year-on-year, while net profit attributable to shareholders increased by 9.96%. The bank's revenue growth has rebounded, customer coverage has expanded, and risk levels remain low, justifying the "Outperform the Market" rating [3]. - The bank's net interest margin decreased by 2 basis points to 1.64% compared to the first half of 2023, but the growth in non-interest income, particularly from investment income, contributed positively to revenue [3]. - Wuxi Bank has deepened its focus on inclusive finance, with a 25.39% increase in the number of credit customers, totaling an increase of 23,300 customers. The total loan balance grew by 11.2% year-on-year, with inclusive loans increasing by 25.15% [3]. - The overall risk remains low, with a non-performing loan ratio of 0.79% at the end of 2023, slightly up by 1 basis point from the previous quarter. The proportion of special mention loans decreased to 0.42% [3]. Financial Performance Summary - Revenue (in million yuan): 2022: 4480, 2023: 4538, 2024E: 4517, 2025E: 4785, 2026E: 5210 [6]. - Net profit (in million yuan): 2022: 2001, 2023: 2200, 2024E: 2362, 2025E: 2476, 2026E: 2597 [6]. - The average return on equity (ROE) is projected to be 12.45% in 2023, decreasing to 11.00% by 2026 [6]. - The bank's earnings per share (EPS) are forecasted to be 1.03, 1.08, and 1.14 yuan for 2024, 2025, and 2026 respectively [4][6]. Valuation Metrics - The reasonable value range for Wuxi Bank is estimated between 5.91 and 6.55 yuan, with a corresponding price-to-earnings (PE) ratio of 5.73 to 6.35 for 2024 [4]. - The bank's price-to-book (PB) ratio for 2024E is projected at 0.70 times, compared to a peer average of 0.54 times [4].