Investment Rating - The investment rating for the company is "Buy-A" with a 6-month target price of 53.90 CNY [5]. Core Views - The company has shown continuous revenue growth in home decoration paint for 2024 and Q1 2025, with a significant increase in net profit due to reduced expenses and impairment losses [2][3]. - The decline in revenue growth is primarily attributed to the decrease in engineering wall paint sales, while home decoration wall paint revenue has increased due to expanded channels and promotional efforts [3][10]. - The company is transitioning towards high-end retail and enhancing its small B channel network, which is expected to drive growth in both retail and engineering segments [10][11]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 12.105 billion CNY (down 2.97% YoY) and a net profit of 332 million CNY (up 91.27% YoY) [2][3]. - For Q1 2025, the revenue was 2.130 billion CNY (up 3.12% YoY) with a net profit of 105 million CNY (up 123.33% YoY) [2][9]. - The company plans to distribute a cash dividend of 3.20 CNY per 10 shares and increase capital stock by 4 shares for every 10 shares held [2]. Revenue Breakdown - Home decoration wall paint revenue reached 2.967 billion CNY (up 12.75% YoY), while engineering wall paint revenue was 4.084 billion CNY (down 12.65% YoY) [3]. - The company’s gross margin for 2024 was 29.60%, with a Q4 gross margin of 32.50% [4][8]. Future Projections - Revenue projections for 2025-2027 are 13.369 billion CNY, 14.674 billion CNY, and 16.016 billion CNY, with net profits expected to be 809 million CNY, 959 million CNY, and 1.125 billion CNY respectively [11][14]. - The company is expected to maintain a dynamic PE of 31.7x, 26.7x, and 22.8x for the years 2025, 2026, and 2027 [11][14].

Core Viewpoint - Changshu Bank reported a strong performance in Q1 2025, with revenue and net profit showing double-digit growth, driven by enhanced non-interest income contributions [1][2]. Financial Performance - Q1 2025 revenue reached 30 billion, a 10% year-on-year increase, while net profit attributable to shareholders was 11 billion, up 13.8% year-on-year [1]. - The weighted average return on equity (ROAE) improved to 14.9%, an increase of 0.2 percentage points year-on-year [1]. - The growth rates for revenue, pre-provision profit, and net profit in Q1 2025 were 10%, 12.6%, and 13.8% respectively, with slight variations compared to Q4 2024 [2]. Asset and Loan Growth - The growth rate of interest-earning assets and loans as of the end of Q1 2025 was 8.3% and 6.1% respectively, both showing a decline compared to the end of 2024 [3]. - New loans in Q1 2025 totaled 8.8 billion, a decrease of 4 billion year-on-year, with corporate loans being the primary contributor [3]. - The bank's strategy focuses on small and micro enterprises, with loans of 10 million and below accounting for 71.3% of total loans [3]. Deposit Trends - The growth of interest-bearing liabilities and deposits in Q1 2025 was 8.6% and 9% respectively, both lower than at the end of 2024 [4]. - New deposits in Q1 2025 amounted to 22.5 billion, a decrease of 13.1 billion year-on-year, with a notable increase in the proportion of time deposits [4]. Net Interest Margin (NIM) - The net interest margin for Q1 2025 was 2.61%, narrowing by 10 basis points compared to 2024 [5]. - The yield on interest-earning assets decreased to 4.41%, down 33 basis points year-on-year, while the cost of interest-bearing liabilities fell to 2.03%, down 24 basis points [5]. Non-Interest Income - Non-interest income grew significantly, reaching 6.5 billion in Q1 2025, a 62% increase year-on-year, contributing 22% to total revenue [5][6]. - Investment income was 6.7 billion, up 21% year-on-year, despite some losses in fair value changes [6]. Asset Quality - The non-performing loan (NPL) ratio remained low at 0.76%, with a slight decrease from the end of 2024 [6]. - The bank's provision coverage ratio was 489.6%, indicating strong risk absorption capacity [6]. Capital Adequacy - As of the end of Q1 2025, the core Tier 1, Tier 1, and total capital adequacy ratios were 10.8%, 10.8%, and 13.7% respectively, all showing a decline from the end of 2024 [7]. - The bank has a low conversion ratio for its 6 billion convertible bonds, with the current stock price providing room for potential conversion [7]. Future Outlook - The bank maintains a strong growth outlook, with EPS forecasts for 2025-2027 at 1.41, 1.56, and 1.65 respectively, indicating a favorable valuation compared to peers [8].