HZBank(SH:600926) Changjiang Securities·2025-07-16 08:43Investment Rating - The investment rating for Hangzhou Bank is "Buy" and is maintained [9]. Core Views - The report indicates that the impact of China Life's planned share reduction of up to 0.70% is limited, primarily driven by its own asset allocation needs, and is not expected to significantly affect the stock price [2][6]. - Hangzhou Bank is recognized as a leader in profit growth among bank stocks and has superior asset quality, with a sustainable high ROE advantage in the medium to long term [2][12]. - The completion of the convertible bond conversion has cleared its impact on the stock price, paving the way for a new round of valuation recovery [12]. Summary by Sections Event Description - On July 15, it was announced that China Life plans to reduce its holdings by no more than 50.79 million shares, representing 0.70% of the total share capital, through centralized bidding or block trading within three months [6]. Event Commentary - The report emphasizes that the reduction in shares by China Life is minor and does not indicate a shift in insurance capital allocation strategies towards bank stocks. The bank's fundamentals remain strong, with a stable non-performing loan ratio of 0.76% and a provision coverage ratio of 530%, the highest in the industry [12][12]. - The bank's asset quality and profit growth are expected to continue leading the industry, supported by a robust economic environment in Zhejiang province, where infrastructure investment and loan growth are significantly above national averages [12]. Financial Data and Forecasts - For 2024, total assets are projected to reach approximately 2.11 trillion yuan, with net profit expected to grow to around 16.98 billion yuan. The bank's net interest income is forecasted to increase to 24.46 billion yuan in 2024 [28]. - The report anticipates a stable performance post-conversion of the convertible bonds, with a projected ROE of 15.6% for 2025, maintaining a competitive edge in the industry [12][28].