常熟银行：业绩韧性较强，非息支撑增长-20250427

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 8.86 [8][11]. Core Views - The company demonstrated strong resilience in performance, with a year-on-year increase in net profit and operating income of 13.8% and 10.0% respectively for Q1 2025 [1]. - Non-interest income has significantly supported growth, with a year-on-year increase of 62% in non-interest income for Q1 2025, contributing to a high revenue growth [3]. - The asset quality remains stable, with a non-performing loan ratio of 0.76% and a provision coverage ratio of 490% as of March 2025 [4]. Summary by Sections Financial Performance - For Q1 2025, the annualized ROE and ROA increased by 0.15 percentage points and 0.06 percentage points to 14.89% and 1.23% respectively [1]. - Interest income growth faced pressure, but non-interest income, particularly from investment gains and foreign exchange, showed rapid growth [1][3]. Credit and Interest Margin - As of March 2025, total assets, loans, and deposits grew by 6.7%, 6.1%, and 6.8% respectively, indicating a cautious approach to credit growth [2]. - The net interest margin decreased by 10 basis points to 2.61%, primarily due to pricing pressure on the asset side [2]. Non-Interest Income and Cost Management - Non-interest income accounted for 22.0% of total revenue, up 7.1 percentage points year-on-year, with significant contributions from investment income and foreign exchange [3]. - The cost-to-income ratio improved, decreasing by 5.4 percentage points to 34.7% [3]. Asset Quality and Capital Adequacy - The company maintains a strong asset quality with a non-performing loan generation rate of 1.09% for Q1 2025, indicating potential short-term pressure on small and micro enterprises [4]. - Capital adequacy ratios as of March 2025 were 13.67% for total capital and 10.78% for core Tier 1 capital, reflecting a slight decrease from the end of 2024 [4]. Valuation and Earnings Forecast - The report forecasts net profits for 2025-2027 to be RMB 42 billion, RMB 47 billion, and RMB 53 billion, with year-on-year growth rates of 10.9%, 11.4%, and 11.6% respectively [5]. - The target price corresponds to a price-to-book ratio of 0.85 for 2025, indicating a valuation premium due to the company's resilient business model [5].