CZBANK(601916) 浙商证券·2024-10-30 08:23Investment Rating - The report maintains a "Buy" rating for Zhejiang Commercial Bank (601916) with a target price of 3.75 CNY per share, representing a 31% upside from the current price of 2.86 CNY as of October 29, 2024 [6][7] Core Views - Zhejiang Commercial Bank's profit growth slowed in Q3 2024, with revenue increasing by 5.6% YoY and net profit attributable to parents rising by 1.2% YoY [2] - The bank's liability costs continued to improve, with the cost rate of liabilities decreasing by 3bp to 2.18% in Q3 2024 [4] - Asset quality remained stable, with the non-performing loan (NPL) ratio flat at 1.43% in Q3 2024, but the provision coverage ratio declined by 3 percentage points to 175% [2][5] Financial Performance - For the first three quarters of 2024, the bank's revenue grew by 5.6% YoY, while net profit attributable to parents increased by 1.2% YoY [2] - The bank's net interest margin (NIM) remained stable at 1.65% in Q3 2024, with asset-side yields declining by 3bp to 3.90% and liability-side costs improving by 3bp to 2.18% [4] - The bank's loan impairment losses increased by 7.5% YoY in the first three quarters of 2024, compared to a 5.0% increase in the first half of 2024 [3] Asset Quality - The NPL ratio remained flat at 1.43% in Q3 2024, while the provision coverage ratio declined by 3 percentage points to 175% [2][5] - The bank's loan impairment balance decreased by 1% QoQ in Q3 2024, despite an increase in impairment provisions [5] Profit Forecast and Valuation - The report forecasts Zhejiang Commercial Bank's net profit attributable to parents to grow by 0.57%, 0.05%, and 0.48% YoY in 2024, 2025, and 2026, respectively [6] - The bank's book value per share (BPS) is expected to increase to 6.25 CNY, 6.60 CNY, and 6.96 CNY in 2024, 2025, and 2026, respectively [6] - The target price of 3.75 CNY per share implies a 2024 price-to-book (PB) ratio of 0.60x [6] Key Financial Ratios - The bank's return on average equity (ROAE) is expected to decline from 8.90% in 2023 to 8.37% in 2024 and further to 8.03% in 2025 [14] - The net interest margin (NIM) is projected to decrease from 1.89% in 2023 to 1.59% in 2024 and 1.49% in 2025 [14] - The cost-to-income ratio is forecasted to remain stable at around 29.50% from 2024 to 2026 [14]