HZBank(600926) 长江证券·2024-07-04 02:01Investment Rating - The report gives a "Buy" rating for Hangzhou Bank [4][8] Core Views - Hangzhou Bank is significantly undervalued and is recognized as a champion in asset quality, benefiting from the economic growth and financing demand in Zhejiang province [5][12] - The bank's loan structure is primarily focused on high-quality urban construction enterprises, maintaining excellent asset quality without compromising on risk [6][7] - The bank's revenue is projected to grow by 3.9% year-on-year in 2024, with net profit expected to increase by 20.8% [8][50] Summary by Sections Economic and Regional Advantages - Hangzhou Bank has a strong presence in the Yangtze River Delta, sharing in the economic development and financing growth of Zhejiang province [5][12] - The province's financing growth is resilient, with significant projects like the "Thousand Projects, Trillion Yuan" initiative driving credit demand [16][17] Loan Structure and Asset Quality - The bank's loan growth is expected to maintain an annualized rate of over 11% in 2024 and 2025, with a focus on urban construction and small and micro enterprises [6][23] - Hangzhou Bank's non-performing loan ratio is at 0.76%, ranking third among listed banks, with a strong provision coverage ratio [7][35] Financial Performance and Projections - The bank's net interest margin is relatively low at 1.50%, primarily due to a higher proportion of financial investments compared to peers [28][30] - The bank's 2024 revenue is forecasted to grow by 3.9%, with net profit expected to rise by 20.8%, leading to an increase in ROE to 16.45% [8][50] Investment Recommendations - The report emphasizes the long-term growth potential of Hangzhou Bank, supported by regional economic advantages and a conservative risk appetite that enhances asset quality [8][54] - The bank's strong non-credit impairment provisions are expected to support profit growth, with a projected PB valuation of 0.74x for 2024 [53][54]