HZBank(SH:600926) Changjiang Securities·2025-08-29 09:12Investment Rating - The investment rating for Hangzhou Bank is "Buy" and is maintained [9] Core Views - The bank's revenue growth rate for the first half of the year is 3.9%, with a year-on-year growth in net profit attributable to shareholders of 16.7%. The net interest income growth rate is 9.4%, with a rebound in Q2 driving revenue growth [2][6] - The bank's non-performing loan ratio remains stable at 0.76%, with a provision coverage ratio of 521%, indicating strong asset quality [2][6] - The bank's capital is effectively supplemented through convertible bonds, and it is expected that the dividend payout ratio will increase year-on-year in 2025, ensuring that the dividend per share (DPS) remains stable [2] Summary by Sections Revenue and Profitability - Revenue growth for the first half of the year is 3.9%, with Q1 at 2.2% and Q2 at 5.6%. Net profit attributable to shareholders grew by 16.7%, with Q1 at 17.3% and Q2 at 16.0%. Net interest income growth was 9.4%, with Q1 at 6.8% [2][6] - The net interest margin for the first half is 1.35%, down 6 basis points from 2024, while deposit costs are improving [2][6] Asset Quality - The non-performing loan ratio is stable at 0.76%, with a provision coverage ratio of 521%, which is leading in absolute terms [2][6] - The bank's non-credit impairment provisions are ample, supporting long-term sustainable profit growth [2] Loan and Deposit Growth - Total loans grew by 7.7% compared to the beginning of the year, with corporate loans increasing significantly by 13% [2] - Deposits increased by 5.2% compared to the beginning of the year, with a slight decrease in the proportion of demand deposits [2] Investment and Non-Interest Income - Non-interest income decreased by 5.0%, remaining stable compared to Q1. Investment income and other non-interest income saw a decline of 11.3% [2] - The bank's wealth management scale increased significantly by 17.3% compared to the beginning of the year [2] Future Outlook - The bank is expected to maintain high profit growth and asset quality leadership, with a significant undervaluation noted. The current price-to-book (PB) ratio is 0.86x, and the price-to-earnings (PE) ratio is 6.2x [2]