Introduction to this report:

The Bank of Suzhou announced that the management holdings increase plan, including the chairman and bank manager, which was disclosed earlier as of November 28, has been implemented. Maintain the target price of 9.21 yuan, maintain an increase in holdings rating, and continue to focus on recommendations.

Key points of investment:

On November 9, the Bank of Suzhou announced that 10 senior executives, including the chairman and governor, intend to increase their holdings of the company by a total of no less than 3 million yuan. On November 28, the company announced that the implementation of the aforementioned plan to increase holdings had been completed, with a total increase of 3.106 million yuan; after the increase in holdings, 10 executives held a total of 0.0548% of the total share capital.

In particular, in addition to directors and executives who are obligated to increase their holdings in the aforementioned plan to increase their holdings, during the period from November 10 to 28, 2023, some supervisors, middle managers and their close relatives purchased 1,8362 million shares of the company's shares through the secondary market with their own capital (corresponding to 1123-1.05 million yuan), fully demonstrating the firm confidence in the company's development prospects and high recognition of investment value from the top down.

It was reiterated that Bank of Suzhou is an extremely scarce bottom growth stock in the banking sector. On the basis of a complete resolution of the previous round of shortcomings, and under the leadership of the new management team in place, it has entered a new stage of accelerated development, and it is expected that its comparative advantage at the financial level will expand further in the future. At the same time, the current valuation and position are at a low level, and the investment security is good and the cost performance ratio is high.

Investment suggestions: Maintain the 2023-2025 net profit growth forecasts of 21.1%, 20.4%, and 20.9%, corresponding to BVPS of 10.76, 11.90, and 13.28 yuan/share. Considering the strong safety margin brought by regional advantages and sufficient provisions, and the new stage of development opens up room for growth and upward flexibility, maintain the target price of 9.21 yuan and maintain the increase rating.

Risk warning: Demand repair falls short of expectations.