HZBank(SH:600926) ZHESHANG SECURITIES·2024-10-22 05:23Investment Rating - The investment rating for Hangzhou Bank is "Buy" [6] Core Views - Hangzhou Bank's net profit for the first three quarters of 2024 increased by 18.6% year-on-year, with a slight decline in growth rate compared to the first half of 2024 [2][4] - The bank's net interest margin improved by 7 basis points to 1.44% in Q3 2024, primarily due to a reduction in funding costs [3][4] - Asset quality remained stable, with a non-performing loan ratio holding steady at 0.76% as of Q3 2024 [3][4] Summary by Relevant Sections Performance Overview - For Q1-3 2024, Hangzhou Bank's net profit grew by 18.6% year-on-year, while revenue increased by 3.9%. The growth rate for both metrics showed a slight decline compared to the first half of 2024 [2][4] - The non-performing loan ratio remained unchanged at 0.76%, and the provision coverage ratio decreased by 2 percentage points to 543% [1][3] Profitability and Valuation - The forecast for net profit growth for Hangzhou Bank from 2024 to 2026 is 17.37%, 15.64%, and 14.48%, respectively. The target price is set at 17.90 CNY per share, corresponding to a price-to-book ratio of 1.00 for 2024 [4][5] - The current share price is 14.50 CNY, indicating a potential upside of 23% [4][5] Asset Quality - As of Q3 2024, the non-performing loan ratio was stable at 0.76%, with the attention loan ratio slightly increasing to 0.59% and the overdue loan ratio decreasing to 0.69% [3][4] - The provision coverage ratio remains high at 543%, indicating strong asset quality management [3][4] Future Outlook - The bank is expected to face some pressure on profit growth due to narrowing interest margins, but it is anticipated to maintain a profit growth rate of over 15% for the full year of 2024 [2][4]