Q3 single-quarter revenue growth turned negative, net interest, non-interest marginal pressure.
Suzhou Bank achieved revenue and return net profit of 91.88 yuan and 3.762 billion yuan (YoY+1.81%, 21.36%) respectively in the first three quarters. Split, Q3 single-quarter revenue and PPOP fell 4.96% and 9.30% respectively compared with the same period last year, the lowest growth rate since 2020Q1. However, due to the continued excellent asset quality and adequate safety cushions, the pressure on single-period provisions has been greatly reduced, which has contributed to a high increase in profits (single-quarter net profit YoY+22.19%). We maintain the profit forecast of Suzhou Bank. It is estimated that the homed net profit for 2023-2025 will be 47440.655max 6.682 billion yuan, an increase of 21.1% over the same period last year. The current stock price (closing price of 2023-10-23) corresponds to 0.6 PB for 2023-2025, and the "buy" rating is maintained.
The prosperity of public loans is still high, which has become the main support for table expansion.
The total assets at the end of Q3 is 583.51 billion yuan (YoY+14.51%), of which the growth rate of loan balance is still high (YoY+18.00%). The demeanor of public loans continued to be high, with 5.5 billion yuan of new loans in Q3 in a single quarter, of which about 3.7 billion yuan contributed to public loans, relying on the regional advantages of Suzhou's "industrial city." Suzhou Bank has a relatively strong credit capacity in manufacturing, leasing business services and other industries all the year round. The growth of Q3 retail loans is still weak, adding only 1.8 billion yuan in a single quarter, down about 60% from the same period last year and negative growth for five consecutive quarters compared with the same period last year. On the whole, the bank of Suzhou has a strong public interest color, with a net interest margin of 1.71% in the first three quarters, a drop of 3BP compared with the first half of the year, the same as the previous value.
The undesirable generation rate in a single quarter is only 0.24%, and the provision coverage rate is thickened at a high level.
The asset quality of Suzhou Bank continues to be excellent and has become the main support for its net profit growth. Q3 wrote off 110 million yuan of non-performing loans, and the write-off efforts were stronger than before. thanks to this, the non-performing loans achieved a "double drop in the quota rate", and the non-performing rate dropped 2BP to 0.84% month-on-month. We estimate that the bad generation rate of Q3 in a single quarter is only 0.24%, and the moat of asset quality is relatively stable. The concern rate is 0.84% higher than the upstream 11BP, but because the provision safety cushion is sufficient (the provision coverage is thickened to 524%), the impact of the marginal increase in interest rate on asset quality can be controlled.
Risk tips: downward macroeconomic growth, tighter regulatory policies, less-than-expected corporate transformation, and so on.