HZBank(SH:600926) ZHESHANG SECURITIES·2025-08-28 13:15Investment Rating - The investment rating for Hangzhou Bank is "Buy" [6] Core Views - Hangzhou Bank's revenue growth rate has improved, and profit growth continues to show a high increase trend, with revenue and net profit attributable to the parent company growing by 3.9% and 16.7% year-on-year respectively in H1 2025 [1][2] - The bank's net interest margin decline has narrowed, with a decrease of 6 basis points in Q2 2025 compared to Q1 2025, primarily due to a larger decline in asset yield than in liability cost [2][3] - Asset quality indicators remain stable, with the non-performing loan ratio holding steady at 0.76% as of the end of Q2 2025 [4] Summary by Sections Performance Overview - In H1 2025, Hangzhou Bank's revenue and net profit attributable to the parent company increased by 3.9% and 16.7% year-on-year, respectively, with revenue growth accelerating by 1.7 percentage points compared to Q1 2025 [1][2] - The non-performing loan ratio remained stable at 0.76% at the end of Q2 2025, with a provision coverage ratio decreasing by 9 percentage points to 521% [1][4] Revenue Growth - The revenue growth rate has improved, mainly due to a narrowing decline in net interest margin, with the Q2 2025 net interest margin declining by 3 basis points to 1.28% [2][3] - The bank is expected to maintain a small single-digit revenue growth in 2025, with stable profit growth anticipated [2] Asset Quality - As of the end of Q2 2025, the non-performing loan ratio, attention loan ratio, and overdue loan ratio remained stable, with slight improvements in generation pressure [4] - Retail loan quality has shown some volatility, particularly in personal business loans and consumer loans, which require close monitoring [4] Profit Forecast and Valuation - The forecast for net profit attributable to the parent company is expected to grow by 14.71% in 2025, 7.64% in 2026, and 5.27% in 2027, with corresponding book values per share of 19.09, 21.25, and 23.52 yuan [5] - The target price is set at 19.09 yuan per share, corresponding to a price-to-book ratio of 1.00 for 2025, indicating a potential upside of 19% from the current price [5]