Changshu Bank(601128) 华创证券·2024-10-25 16:37Investment Rating - The report maintains a "Recommended" rating for Changshu Bank (601128) with a target price of 8.00 CNY, compared to the current price of 7.17 CNY [1]. Core Views - Changshu Bank's performance continues to show high growth, with a year-on-year increase in operating income of 11.3% to 8.37 billion CNY and a net profit attributable to shareholders of 2.98 billion CNY, reflecting an 18.2% growth [1][2]. - The bank's asset quality remains strong, with a slight increase in the non-performing loan (NPL) ratio to 0.77% and a decrease in the provision coverage ratio to 528.4% [1]. - The report highlights a marginal improvement in the net generation of non-performing loans, which decreased by 63 basis points to 0.59% [1]. Summary by Sections Financial Performance - For the first three quarters of 2024, operating income reached 8.37 billion CNY, with a year-on-year growth of 11.3%, slightly down from the first half of 2024 [1]. - The net profit attributable to shareholders was 2.98 billion CNY, with an 18.2% year-on-year increase, showing a slight deceleration compared to the first half of 2024 [1]. - The bank's net interest income grew by 6.3% year-on-year, while non-interest income saw a significant decline of 20.2% [1]. Asset Quality - The NPL ratio increased slightly by 1 basis point to 0.77%, which is still considered excellent within the industry [1]. - The provision coverage ratio decreased by 10.3 percentage points to 528.4%, indicating a strong risk mitigation capacity [1]. - The report notes that the marginal improvement in asset quality is supported by a decrease in the net generation rate of non-performing loans [1]. Loan and Deposit Growth - As of the end of Q3 2024, the growth rates for interest-earning assets and loans were 10.3% and 9.7% year-on-year, respectively, with a decline in growth rates compared to previous quarters [1]. - Corporate loans maintained a robust growth rate, while retail loan demand remained weak, leading to a slowdown in overall loan growth [1]. Future Outlook - The report projects revenue growth rates of 11.4%, 12.4%, and 13.7% for 2024, 2025, and 2026, respectively, with net profit growth rates of 17.2%, 19.9%, and 19.4% for the same years [1][2]. - The current stock price corresponds to a 2025 estimated price-to-book (PB) ratio of 0.67X, with a target PB of 0.75X for 2025 [1].