\u3000\u3000 Bank Of Suzhou Co.Ltd(002966) (002966)
The regional economy has obvious advantages and broad expansion space
In the past five years, Suzhou’s GDP has ranked among the top 10 in China, and its per capita disposable income and population inflow have ranked among the top. At the same time, Suzhou’s industry is developed, and the proportion of industrial output value of small and medium-sized micro enterprises continues to increase, creating an excellent environment for Bank Of Suzhou Co.Ltd(002966) deep cultivation of small and medium-sized enterprises. After being restructured into a city commercial bank in 2011, Bank Of Suzhou Co.Ltd(002966) further increased its expansion in other places. At present, its business outlets basically cover the whole Jiangsu Province, and the proportion of loans in other parts of Jiangsu Province has increased to 38.65% in the first half of 2021.
Practice the big retail strategy of “small for beauty and people for beauty”
Bank Of Suzhou Co.Ltd(002966) is the only local business firm in Suzhou. Based on the economic environment in Suzhou, the company has been deeply engaged in small and medium-sized enterprises for many years, took the lead in initiating the reform of business division, and gradually explored a small and micro business model in line with its own development. The proportion of public loans to small and micro enterprises accounts for about 70%.
The company’s retail strategy has achieved remarkable results, and there is still great room for growth in the future. At present, the proportion of retail loans of the company is about 35%, showing a trend upward trend. At present, the proportion of mortgage loans, consumer loans and operating loans in the company’s retail loans is 43%, 18% and 39% respectively, of which the proportion of consumer loans is relatively low. The people’s livelihood in Jiangsu is rich, and there is a lot of room for growth in the future. Mortgage loans accounted for 14.9% of the total loans, which was lower than the regulatory requirements of concentration and could still maintain steady growth.
The scale of assets has expanded steadily and the quality of assets is excellent
The scale of Bank Of Suzhou Co.Ltd(002966) has achieved an average annual small double-digit growth in recent five years. Jiangsu Province is economically developed and the company’s strategic positioning is clear. It is expected to maintain good growth. Bank Of Suzhou Co.Ltd(002966) asset quality has continued to improve. Since the epidemic, the disposal of non-performing assets has been further increased, the burden of non-performing stock has been reduced, and new non-performing assets have been strictly controlled. The attention rate decreased from 4.73% at the end of 2016 to 1.06% at the end of September 2021, the non-performing rate decreased from 1.49% to 1.17% in the same period, and the provision coverage increased to 410%.
Investment advice
Combining the absolute valuation and relative valuation methods, we believe that the intrinsic value of Bank Of Suzhou Co.Ltd(002966) is 10.3 ~ 13.1 yuan, corresponding to 0.91 ~ 1.16 times of dynamic Pb in 2022, and give a “overweight” rating.
Risk tips
Changes in various factors may affect our judgment. See the text for details
