HZBank(SH:600926) Changjiang Securities·2024-09-04 09:10Investment Rating - The investment rating for Hangzhou Bank is "Buy" and is maintained [5][6]. Core Views - The report expresses a strong outlook for Hangzhou Bank's development, emphasizing the company's long-standing low-risk preference, which is increasingly advantageous in the current economic cycle. This is a key factor supporting the bank's net profit growth, which is expected to continue leading the industry. The bank is projected to achieve a revenue growth of 4.4% and a net profit growth of 21.0% year-on-year in 2024, with a valuation of only 0.69x 2024 PB [2][6]. Summary by Relevant Sections Financial Performance - In the first half of 2024, Hangzhou Bank's revenue grew by 5.4% year-on-year, while net profit attributable to shareholders increased by 20.1%. The non-performing loan ratio remained stable at 0.76%, ranking second among listed banks, with a provision coverage ratio of 545%, down 6 percentage points [6][9]. Loan Growth - The total loan amount increased by 11.7% compared to the beginning of the period, with corporate loans growing by 14.7%. Personal loans also saw a growth of 6.0%, with mortgage loans up by 4.4%. Notably, loans outside the local area surged by 26%, reflecting the robust investment demand in Zhejiang province [6][9]. Interest Income - The net interest margin for the first half of 2024 was 1.42%, down 8 basis points from the previous year. However, interest income growth has turned positive at 0.5%, supported by a decline in deposit costs. The loan yield decreased by 25 basis points to 4.35%, indicating a high-quality customer base [6][9]. Investment Recommendations - The report highlights the strong growth potential of Hangzhou Bank, driven by the favorable economic environment in Zhejiang province. The bank's conservative risk approach is expected to yield continued growth in net profit, with a projected revenue growth of 4.4% and net profit growth of 21.0% for 2024. The current valuation is considered attractive at 0.70x 2024 PB, leading to a strong recommendation to buy [2][6].