HZBank(SH:600926) HTSC·2024-08-04 06:03Investment Rating - The report maintains an "Overweight" rating for Hangzhou Bank with a target price of RMB 14.42 [13]. Core Views - The bank's revenue growth accelerated in H1 2024, with a year-on-year increase of 5.4%, and net profit grew by 20.1% [13]. - The bank's asset quality remains stable, with a non-performing loan (NPL) ratio of 0.76% [13]. - The bank is well-positioned in a high-demand region, benefiting from strong infrastructure needs and investment attraction [13]. Financial Performance Summary - Revenue and Profit Forecasts: - 2024E Revenue: RMB 36,602 million - 2024E Net Profit: RMB 17,261 million - EPS Forecasts: 2024E: RMB 2.91, 2025E: RMB 3.47, 2026E: RMB 4.13 [21]. - Valuation Metrics: - 2024E PB: 0.75x, with a target PB of 0.80x [13]. - 2024E ROE: 14.59%, with a projected increase to 16.10% by 2026E [21]. - Asset Quality: - NPL ratio is stable at 0.76%, with a provision coverage ratio of 545% [13]. - Growth in Assets and Loans: - Total assets grew by 13.8%, loans by 16.5%, and deposits by 13.7% year-on-year as of June 2024 [13]. Market Position and Strategy - Hangzhou Bank has a strong management system and geographical advantages, covering Zhejiang province and extending to major cities like Beijing, Shanghai, and Shenzhen [14]. - The bank has diversified shareholders, including local state-owned enterprises and foreign strategic investors, enhancing its market governance [14]. - The bank is actively exploring the technology finance sector, establishing a unique market position [14]. Capital Adequacy - The bank's core Tier 1 capital adequacy ratio is projected to increase to 9.74% if the RMB 150 billion convertible bonds are fully converted [14].