CZBANK(601916) 华创证券·2025-04-03 04:47Investment Rating - The report maintains a "Recommendation" rating for Zhejiang Merchants Bank, with a target price of 3.73 CNY / 3.22 HKD [2][7]. Core Views - The bank achieved an operating income of 67.65 billion CNY in 2024, representing a year-on-year growth of 6.2%. The net profit attributable to shareholders was 15.19 billion CNY, up 0.9% year-on-year. The non-performing loan ratio decreased by 5 basis points to 1.38%, while the provision coverage ratio increased by 3.3 percentage points to 179% [2][7]. - The bank's financial performance is supported by strong non-interest income growth, with a significant increase in investment income from the bond market and a more than 240% year-on-year rise in other non-interest income in Q4 2024 [7]. - The bank is focusing on improving asset quality and has proactively increased provisions, leading to an 8% rise in asset impairment losses year-on-year [7]. Financial Summary - Key Financial Indicators: - Total operating income (million CNY): 67,650 in 2024, projected to grow to 70,041 in 2025E, 73,785 in 2026E, and 78,728 in 2027E, with year-on-year growth rates of 6.19%, 3.53%, 5.34%, and 6.70% respectively [2][8]. - Net profit attributable to shareholders (million CNY): 15,186 in 2024, expected to rise to 15,923 in 2025E, 17,173 in 2026E, and 18,360 in 2027E, with growth rates of 0.92%, 4.85%, 7.85%, and 6.91% respectively [2][8]. - Earnings per share (CNY): 0.55 in 2024, projected to increase to 0.58 in 2025E, 0.63 in 2026E, and 0.67 in 2027E [2][8]. - Price-to-earnings ratio: 5.35 in 2024, decreasing to 4.43 by 2027E [2][8]. - Price-to-book ratio: 0.47 in 2024, expected to decline to 0.38 by 2027E [2][8]. Asset Quality and Risk Management - The bank's non-performing loan ratio improved, with a decrease to 1.38% and a net generation rate of non-performing loans down to 1.37% in Q4 2024 [7][10]. - The provision coverage ratio is projected to increase to 207% in 2025E and 275% in 2027E, indicating a strong risk management framework [10][11]. - The bank's strategy includes focusing on less sensitive assets to economic cycles, which aims to mitigate risks associated with high industry concentration and economic fluctuations [7].