Changshu Bank(601128) 国投证券·2025-04-27 06:05Investment Rating - The investment rating for Changshu Bank is "Buy-A" with a 6-month target price of 9.63 CNY, compared to the current stock price of 7.26 CNY [6]. Core Views - Changshu Bank's performance in Q1 2025 shows resilience, with revenue growth of 10.04%, pre-provision profit growth of 12.58%, and net profit growth of 13.81%. Although the growth rates have slightly declined, they remain at a high level [1]. - The bank's performance is primarily driven by the expansion of interest-earning assets and an increase in net non-interest income, despite a significant drag from declining interest margins [1]. Summary by Sections Asset Growth - As of the end of Q1 2025, Changshu Bank's total assets grew by 6.67% year-on-year, with an increase of 22.4 billion CNY in total assets during the quarter. Financial investments contributed 11.7 billion CNY, accounting for 52.00% of the increase, while loans increased by 8.8 billion CNY [2]. - The loan portfolio saw a year-on-year growth of 6.12%, supported by corporate loans, while financial investments increased by 3.36%. The proportion of loans in interest-earning assets decreased by 1.49 percentage points to 63.36% [2]. Retail and Corporate Lending - Retail loan demand remains weak, with a year-on-year growth of only 0.1% in retail loans. The bank has proactively slowed down retail loan disbursements due to ongoing retail risks [3]. - Corporate loans grew by 13.04% year-on-year, with a stable growth rate. The bank focused on supporting technology innovation enterprises and small businesses, with loans of 10 million CNY or less making up 71.33% of total loans [3]. Liability Management - As of the end of Q1 2025, deposits grew by 9.00% year-on-year, outpacing loan growth, with a continuous optimization of the deposit structure. The proportion of demand deposits increased by 1.06 percentage points to 19.17% [4]. Interest Margin and Non-Interest Income - The net interest margin for Q1 2025 was 2.61%, showing a year-on-year decline of 22 basis points but a quarter-on-quarter improvement of 2 basis points. The bank's loan yield was 5.42%, down 21 basis points from the beginning of the year [5]. - Non-interest income saw a significant increase of 62.01% year-on-year, driven by a 495.23% increase in net fee income, primarily due to a low base last year and increased fees from services like precious metals and insurance [9]. Cost Efficiency and Asset Quality - The cost-to-income ratio improved to 34.74%, down 0.52 percentage points year-on-year, indicating initial success in cost reduction and efficiency enhancement [9]. - The non-performing loan ratio improved to 0.76%, with a provision coverage ratio of 489.56%. The bank is expected to continue efforts in managing non-performing loans [9]. Future Outlook - The bank is expected to maintain resilience in performance, with projected revenue growth of 9.71% and profit growth of 13.39% for 2025. The focus will be on optimizing customer service and enhancing small business lending [10].