Summary of the first quarter report: the revenue has increased and the net profit has maintained a steady growth. The better bond market conditions led to the increase of other non interest income. The cumulative year-on-year growth rate of revenue in the first quarter of 2024 was 0.2 percentage points higher than that in the fourth quarter of last year to 1.2%; The quality of the company's assets remained at an excellent level. Under the consideration of conservatism, the provision was increased, and the net profit increased by 12.3% year on year. The growth rate remained at a high level.
Net interest income: Q1 net interest income+1.3% month on month, and the price is supplemented by quantity. The annualized interest margin in a single quarter was 1.58%, down 7 bp month on month. However, under the high credit growth rate at the beginning of the first quarter, the price was compensated by volume, and the net interest income increased month on month. The return rate on the asset side declined by 15bp to 3.94% month on month, which is expected to be mainly affected by repricing and LPR decline. The debt end interest payment rate fell by 7bp to 2.26% month on month, which has a certain degree of mitigation to the decline of interest margin. On the one hand, the reduction of deposit interest rate gradually began to play a role, and on the other hand, the proportion of deposits also increased.
Growth rate and structure of assets and liabilities: deposits and loans increased rapidly, and the start was good. 1) Loan: In terms of the scale of loan, Bank of Suzhou will increase the loan by 42.77 billion yuan in 2023 and 37.35 billion yuan in 2022; In the first quarter of 2024, the scale of single quarter investment will be 28.48 billion yuan, an increase of 58.2% over the same period last year. From the perspective of the distribution structure, the distribution in the first quarter was mainly on the public side, with corporate/personal loans of 27.33/1.15 billion yuan respectively, and the proportion changed by+1.9/- 1.1 percentage points to 36.1%/15.9%, and the proportion of total credit increased by 1 percentage point to 52.1%. From the perspective of specific industries, the proportion of new corporate credit increased by 21.5 percentage points to 83.9% compared with 2022, mainly because the company increased the credit supply in the real estate field. In 2023, the proportion of new real estate and construction loans increased by 15.8% to 24.0% compared with 2022. 2) Deposits: In terms of total deposits, Bank of Suzhou added 47.47 billion yuan in 2023, slightly higher than that in 2022. In the first quarter of 2024, deposits increased significantly, 47.26 billion yuan in a single quarter, an increase of 28.7% over the same period last year, and the proportion of interest bearing liabilities increased by 2.9 percentage points to 70.3%. From the perspective of structure, the trend of fixed deposit continues. Time deposits in 4Q23 increased by 25.2% year-on-year, accounting for 70.4% of total deposits.
Asset quality: the non-performing ratio remains low and stable, and the asset quality remains excellent. 1. Bad dimension - the defective rate remains low and stable. 1Q24 The non-performing ratio of Bank of Suzhou was 0.84%, unchanged month on month, and the annual non-performing net generation rate of a single quarter decreased by 24bp to 0.10%, and the asset quality remained excellent. In terms of future non-performing pressure, special attention loans accounted for 0.77%, down 4 bp month on month, and the future pressure was not great. 2. Overdue dimension - the overdue rate continues to decline. The overdue rate of 4Q23 dropped by 1bp to 0.72% compared with the middle of the year. 3. Provision dimension - provision has declined, but it still remains at a high level. In the first quarter, the provision coverage rate fell by 31.06 percentage points month on month to 491.65%, still maintaining a high level of about 500%; The loan allocation ratio declined 26 bp month on month to 4.13%.
Investment suggestion: 2024E, 2025E PB 0.61X/0.55X; PE 5.07X/4.61X， The company is deeply rooted in Suzhou, and the business division has a unique structure. Have regional advantages for public projects; The retail end relies on the qualification of the citizen card sponsor to build a perfect system of benefiting the people, obtain a stable retail customer base, and continue to deepen the retail strategy. Excellent asset quality and high safety margin. Maintain the "buy" rating and suggest keeping track.
Note: According to the company's annual report and relevant macro data, we have adjusted the assumptions of credit growth, yield/interest rate, credit cost, etc. of Bank of Suzhou. The 2024E/2025E revenue is adjusted to 12.05/1265 billion yuan (original value is 13.16/14.31 billion yuan), and the net profit is adjusted to 5.15/567 billion yuan (original value is 5.66/669 billion yuan).
Risk warning: the economic downturn exceeds expectations, the company's operation falls short of expectations, and the research report information is not updated in time.
