HZBank(SH:600926) HTSC·2025-08-28 05:21Investment Rating - The investment rating for the company is maintained at "Buy" [1] Core Views - The report highlights excellent performance growth and solid capital levels for the company, with a focus on narrowing interest margin declines, recovering non-interest income growth, and robust capital adequacy [6][7][9] - The target price is set at RMB 19.01, with the current closing price at RMB 15.86, indicating a potential upside [2] Financial Performance Summary - For the first half of 2025, the company's net profit attributable to shareholders increased by 16.7% year-on-year, while operating revenue grew by 3.9% [6] - The annualized ROE and ROA for the same period were 19.00% and 1.07%, respectively [6] - Total assets, loans, and deposits grew by 12.6%, 12.0%, and 16.2% year-on-year, respectively [6] - The net interest margin for the first half of 2025 was 1.35%, with net interest income increasing by 9.4% year-on-year [6][7] Revenue and Profit Forecast - Revenue projections for the upcoming years are as follows: - 2024: RMB 38,381 million (growth of 9.61%) - 2025E: RMB 39,610 million (growth of 3.20%) - 2026E: RMB 42,656 million (growth of 7.69%) - 2027E: RMB 46,242 million (growth of 8.41%) [5] - Net profit forecasts are: - 2024: RMB 16,983 million (growth of 18.07%) - 2025E: RMB 19,700 million (growth of 16.00%) - 2026E: RMB 22,994 million (growth of 16.72%) - 2027E: RMB 26,861 million (growth of 16.81%) [5] Asset Quality and Capital Adequacy - The non-performing loan (NPL) ratio stood at 0.76% with a provision coverage ratio of 521%, indicating strong asset quality [8] - The core Tier 1 capital adequacy ratio improved to 9.74% as of the end of the second quarter of 2025 [7][9] Valuation Metrics - The report assigns a target price-to-book (PB) ratio of 1.00x for 2025, with a corresponding target price of RMB 19.01 [9] - The company's estimated PB for 2025 is 0.83x, compared to the average PB of comparable companies at 0.73x [9]