杭州银行：季报点评：资产稳定扩张，息差边际企稳

Investment Rating - Investment Rating: Maintain "Buy" [1] - Target Price: RMB 17.60 [1] Core Views - The company reported a year-on-year increase in net profit, revenue, and PPOP of 18.6%, 3.9%, and 3.5% respectively for the first nine months, with a slight decline in growth rates compared to the first half of the year [1][2] - Key highlights include stabilization of net interest margin, recovery in interest income growth, and a narrowing decline in non-interest income [1][2] - The company announced a mid-term dividend plan with a proposed dividend of RMB 0.37 per share, resulting in a dividend payout ratio of 22.60% and a dividend yield of 5.10% [1] Summary by Sections Financial Performance - As of September, total assets, loans, and deposits grew by 12.7%, 15.9%, and 16.4% respectively, with a slight slowdown in credit growth due to front-loaded disbursement [2] - The annualized net interest margin for Q1-Q3 was 1.46%, up by 2 basis points from the first half of 2024, with interest income growth recovering to 3.9% year-on-year [2] Non-Interest Income and Capital Levels - Non-interest income decreased by 8.1% year-on-year, but the decline rate has narrowed, indicating potential recovery in the wealth management market [3] - Investment income increased by 13.8% year-on-year, although growth has slowed compared to the first half of the year [3] - As of September, the core Tier 1 capital adequacy ratio and total capital adequacy ratio were 8.76% and 13.78%, respectively, showing further strengthening of capital levels [3] Asset Quality - The non-performing loan (NPL) ratio remained stable at 0.76%, with a provision coverage ratio of 543% [4] - The generation of non-performing loans has slightly increased, with an annualized NPL generation rate of 0.54% for Q3 [4] Valuation and Profit Forecast - The forecast for net profit attributable to shareholders for 2024-2026 is RMB 170 billion, RMB 199 billion, and RMB 233 billion, with year-on-year growth rates of 17.9%, 17.5%, and 16.9% respectively [5] - The target price corresponds to a price-to-book (PB) ratio of 0.85 for 2025, reflecting the company's strong regional presence and leading profitability [5]