Introduction to this report:

Guoda Group, the largest shareholder of the Bank of Suzhou, whose shareholding ratio exceeds 10% has been approved as a shareholder, and a subsequent increase in holdings can be expected.

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 December 11, the Bank of Suzhou announced that the shareholder status of China Development Group has been approved. China Development Group is the largest shareholder of Bank of Suzhou. The current shareholding ratio is 9.6%. Recently, the shareholding ratio exceeded 10% and the eligibility was approved by local regulations. It is speculated that the purpose of applying for early eligibility is to prepare for a subsequent increase in holdings, but it is not yet known exactly when and how to increase holdings. If the National Development Group increases its holdings through equity, increasing its shareholding ratio to more than 10%, based on today's closing price estimates, the proposed increase in holdings is not less than 95 million yuan.

First, management increased their holdings, and then shareholder qualifications were approved, fully demonstrating confidence in the company's development prospects and recognition of investment value. In November, Bank of Suzhou management and others just completed a round of holdings increase, totaling close to 15 million yuan. After the current shareholder qualification of the National Development Group is approved, it is possible to expect an increase in its holdings in the future. This series of events is expected to boost market expectations.

Bank of Suzhou is an extremely scarce bottom growth stock in the banking sector. On the basis of the previous round of thorough removal of faults, 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, current valuations and positions are at a low level, investment is cost-effective, and safety is good.

Investment advice: Maintain the 2023-2025 net profit growth forecasts of 21.1%, 20.4%, and 20.9%. 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, the target price of 9.21 yuan was maintained, and the increase rating was maintained.

Risk warning: Demand repair falls short of expectations.