HZBank(SH:600926) Guoxin Securities·2025-05-27 13:25Investment Rating - The investment rating for Hangzhou Bank is "Outperform the Market" (maintained) [1][6] Core Views - The report highlights that Hangzhou Bank is expected to undergo a value reassessment due to the triggering of conditional redemption for its convertible bonds, indicating strong growth potential [2][3] - The bank's capital position is solid, with a core Tier 1 capital adequacy ratio of 9.01% as of Q1 2025, and the unconverted balance of the convertible bonds is estimated to enhance this ratio by 0.83 percentage points upon conversion [3] - The bank continues to show high growth in lending, with total assets reaching CNY 2.22 trillion and total loans at CNY 1 trillion, reflecting year-to-date growth rates of 5.2% and 6.2% respectively [3] - The asset quality remains strong, with a non-performing loan ratio of 0.76%, and the bank has the highest provision coverage ratio among listed banks at 530% [4] Financial Performance Summary - For Q1 2025, the bank's revenue grew by 2.22% year-on-year, while net profit attributable to shareholders increased by 17.3% [3] - The bank's net interest income rose by 6.8% year-on-year, despite a decline in other non-interest income [3] - The bank's total deposits reached CNY 1.35 trillion, with a year-to-date growth of 6.0% [3] Future Outlook - The report suggests that Hangzhou Bank's governance and regional economic advantages position it well for continued high growth, especially as counter-cyclical policies are expected to be implemented [10] - The bank is anticipated to benefit from the low interest rate environment and increased capital inflows, making it a valuable investment option in the second half of the year [10] - The projected earnings per share (EPS) for 2025 is CNY 3.26, with a forecasted return on equity (ROE) of 17.5% [13]