HZBank(SH:600926) EBSCN·2024-10-22 06:03Investment Rating - The investment rating for Hangzhou Bank is "Buy" (maintained) with a current price of 14.50 CNY [1]. Core Insights - Hangzhou Bank reported a revenue of 28.49 billion CNY for the first three quarters of 2024, representing a year-on-year growth of 3.9%, and a net profit attributable to shareholders of 13.87 billion CNY, which is an 18.6% increase year-on-year [4][5]. - The bank's annualized weighted average return on equity (ROE) stands at 18.01%, reflecting a year-on-year increase of 0.52 percentage points [4]. - The bank's board approved a mid-term dividend plan, distributing 3.7 CNY per 10 shares (including tax), with a dividend payout ratio of 22.6% based on net profit attributable to ordinary shareholders [9]. Summary by Sections Revenue Performance - For the first three quarters of 2024, the revenue growth rates were 3.9% for total revenue, 3.4% for pre-provision operating profit (PPOP), and 18.6% for net profit attributable to shareholders, showing a slight decline compared to the first half of 2024 [5]. - Net interest income increased by 3.9% year-on-year, with a notable improvement in growth rate compared to the first half of 2024 [5]. - Non-interest income also grew by 3.9% year-on-year, although the growth rate decreased compared to the first half of 2024 [8]. Asset Quality - The non-performing loan (NPL) ratio remained stable at 0.76%, unchanged for seven consecutive quarters, while the overdue loan ratio decreased to 0.69% [8][20]. - The bank's provision coverage ratio is at 543.3%, indicating a strong buffer against potential loan losses [8][20]. Capital Adequacy - As of the end of Q3 2024, the core tier one capital adequacy ratio, tier one capital adequacy ratio, and total capital adequacy ratio were 8.76%, 11.00%, and 13.78%, respectively, all showing improvements from the previous quarter [8][17]. - Risk-weighted assets increased by 9.6% year-on-year, reflecting the bank's growth strategy [17]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2024 is 2.90 CNY, with projections of 3.44 CNY and 4.05 CNY for 2025 and 2026, respectively [9][19]. - The bank's price-to-earnings (P/E) ratio is projected to decrease to 5.00 in 2024, indicating a potentially attractive valuation [19][20].