HZBank(600926) 国信证券·2024-08-29 04:00Investment Rating - The report maintains an "Outperform" rating for Hangzhou Bank (600926 SH) [1][3] Core Views - Hangzhou Bank's revenue growth accelerated in H1 2024, with operating income reaching 19 3 billion yuan, up 5 4% YoY, an increase of 1 9 percentage points compared to Q1 [1] - Net profit attributable to shareholders reached 10 billion yuan, growing 20 1% YoY, though the growth rate slowed by 1 0 percentage points compared to Q1 [1] - The annualized weighted average ROE stood at 19 5%, up 0 8 percentage points YoY, indicating strong profitability [1] - Net interest income turned positive, growing 0 5% in H1 after a 1 9% decline in Q1, while non-interest income grew 14% YoY [1] - The bank's loan portfolio maintained rapid growth, with total loans reaching 0 9 trillion yuan, up 11 7% from the beginning of the year [1] - Asset quality remained excellent, with a non-performing loan ratio of 0 76%, and the provision coverage ratio stood at 545%, still leading among peers [1] Financial Performance - Total assets reached nearly 2 0 trillion yuan, up 7 8% from the beginning of the year [1] - The net interest margin was 1 42%, down 14bps YoY, mainly due to a 21bps decline in the average interest rate of interest-earning assets [1] - The bank strengthened deposit cost control, with the average interest rate of interest-bearing liabilities decreasing by 10bps YoY [1] - Credit impairment losses decreased by 26% YoY, as financial investment losses were reversed by approximately 1 583 billion yuan [1] Regional Strategy - The bank increased loan distribution in Zhejiang Province outside Hangzhou, with the proportion of loans in non-Hangzhou areas of Zhejiang reaching 37 4%, up 4 3 percentage points from the beginning of the year [1] - The proportion of loans in Zhejiang Province remained stable at 78 4% [1] Future Projections - The report maintains forecasts for net profit attributable to shareholders of 17 4/20 9/24 4 billion yuan for 2024-2026, representing YoY growth rates of 21 1%/20 1%/16 6% [1] - The current stock price corresponds to 2024-2026 PE ratios of 4 5x/3 8x/3 2x and PB ratios of 0 72x/0 62x/0 54x [1] Financial Metrics - EPS is projected to grow from 2 94 yuan in 2024E to 4 11 yuan in 2026E [4] - ROE is expected to increase from 17 2% in 2024E to 18 0% in 2026E [4] - The core tier 1 capital adequacy ratio is forecasted to improve from 8 36% in 2024E to 9 10% in 2026E [4]