HZBank(SH:600926) Orient Securities·2024-07-26 07:31Investment Rating - The report maintains a "Buy" rating for Hangzhou Bank, with a target price of 15.35 CNY per share, reflecting a 20% valuation premium over the industry average [2][4]. Core Insights - Hangzhou Bank's revenue growth rate improved by nearly 2 percentage points quarter-on-quarter in H1 2024, with a year-on-year profit growth rate exceeding 20%. The bank's revenue and net profit attributable to shareholders grew by 5.4% and 20.1% respectively compared to the previous year [1]. - The bank benefits from strong regional credit demand, maintaining a high level of loan issuance. As of H1 2024, total assets and loans grew by 13.8% and 16.5% year-on-year, respectively [1]. - Asset quality remains excellent, with a non-performing loan ratio of 0.76% and a provision coverage ratio of 545.2%, indicating a solid buffer for potential losses [1]. Financial Performance Summary - Revenue (in million CNY): 2022A 32,932, 2023A 35,016, 2024E 36,880, 2025E 38,275, 2026E 40,669, with year-on-year growth rates of 12.2%, 6.3%, 5.3%, 3.8%, and 6.3% respectively [6]. - Net profit (in million CNY): 2022A 11,679, 2023A 14,383, 2024E 17,292, 2025E 20,344, 2026E 24,056, with year-on-year growth rates of 26.1%, 23.2%, 20.2%, 17.7%, and 18.2% respectively [6]. - Earnings per share (EPS): 2022A 1.83, 2023A 2.31, 2024E 2.80, 2025E 3.31, 2026E 3.94 [6]. Valuation Metrics - The current stock price corresponds to a price-to-book (PB) ratio of 0.72X for 2024, 0.63X for 2025, and 0.54X for 2026. The average PB ratio for comparable companies in 2024 is 0.71X [2][4]. - The report suggests a target PB ratio of 0.85X for Hangzhou Bank, reflecting its strong performance amidst industry challenges [2].