Profit growth accelerated. The net profit of parent company in 23Q3 increased by 22.19% year-on-year, which was further increased by 1.2pct compared with the year-on-year growth rate of 23H1 profit. Annualized weighted average return on equity rose 0.76pct year-on-year to 12.72%. The performance split can be found, Suzhou Bank revenue growth compared with 23Q2 decline, mainly because of net interest margin pressure.

The proportion of loans in assets further increased. The proportion of loans in assets increased by 0.65pct to 50.77% compared with 23Q2, and loans in 23Q3 increased by 18.3% compared with 22Q3, among which corporate loans increased by 23.5% compared with 22Q3, and personal loans increased by 8.6% year-on-year.

Asset quality and loan allocation ratio are basically stable. The non-performing rate decreased by 2bps to 0.84% compared with the end of 23Q2, the provision coverage ratio increased by 12.28pct to 524.13% compared with 23Q2, and the loan allocation increased slightly by 1bp to 4.41% compared with 23Q2. The proportion of loans of concern increased by 11bps to 0.84% at the end of Q2.

Investment advice. We forecast EPS of 1.31, 1.53 and 1.74 yuan from 2023 to 2025, and net profit growth rate of parent company is 22.89%, 16.82% and 13.38%. According to the DDM model (see Table 2), we obtained a reasonable value of RMB 10.71; according to the comparable valuation method, we gave the company 2023E PB a valuation of 1.00 times (0.59 times for comparable companies), corresponding to a reasonable value of RMB 10.57. Therefore, the reasonable value range is 10.57-10.71 yuan (corresponding to 8.05-8.16 times PE in 2023 and 4.26 times PE for peer companies), maintaining the rating of "better than the market".

Risk hints: the solvency of enterprises has declined, asset quality has deteriorated significantly, and major changes have taken place in financial regulatory policies.