HZBank(SH:600926) EBSCN·2025-08-28 04:20Investment Rating - The report maintains a "Buy" rating for Hangzhou Bank (600926.SH) [1] Core Views - Hangzhou Bank's revenue improved quarter-on-quarter, with a year-on-year revenue increase of 3.9% to 20.09 billion, and a net profit attributable to shareholders of 11.66 billion, up 16.7% year-on-year [3][4] - The bank's annualized weighted average return on equity (ROE) stands at 19%, a slight decrease of 0.48 percentage points year-on-year [3] Revenue and Profitability - The bank's revenue, pre-provision operating profit (PPOP), and net profit attributable to shareholders for the first half of 2025 grew by 3.9%, 4.7%, and 16.7% year-on-year, respectively [4] - Net interest income increased by 9.4% year-on-year, while non-interest income decreased by 5%, with the decline narrowing compared to the first quarter [4][8] Asset and Loan Growth - As of the end of the second quarter, the bank's interest-earning assets and loans grew by 12.7% and 12% year-on-year, respectively [5] - The proportion of loans in interest-earning assets slightly increased to 45.2% [5] Deposit and Funding Structure - The growth rate of interest-bearing liabilities and deposits was 12.4% and 16.2% year-on-year, respectively, both showing a decline compared to the first quarter [6] - Retail deposits increased, while corporate deposits decreased, indicating competitive pressures in the market [6] Interest Margin and Cost Management - The net interest margin narrowed by 6 basis points to 1.35% compared to the beginning of the year [7] - The bank has been actively managing costs, with a decrease in the cost of interest-bearing liabilities by 26 basis points to 1.87% [7] Asset Quality - The non-performing loan (NPL) ratio remained stable at 0.76%, with a strong provision coverage ratio of 520.9%, leading the industry [9][10] Capital Adequacy - The bank's capital adequacy ratios improved significantly, with the core Tier 1 capital ratio reaching 9.74% as of the end of the second quarter [10][32] Earnings Forecast and Valuation - The report forecasts earnings per share (EPS) for 2025-2027 at 2.72, 3.18, and 3.71 yuan, respectively, with corresponding price-to-book (PB) ratios of 0.91, 0.80, and 0.69 [11][12]