CMS·2025-09-01 04:04Investment Rating - The report maintains a strong buy recommendation for Zhejiang Commercial Bank (601916.SH) [5] Core Views - The bank is focusing on controlling scale while improving quality and efficiency, indicating a shift towards stable development rather than rapid growth [2][3] - The bank's asset quality is showing improvement, with a decrease in non-performing loans and a stable outlook for future risks [2][3] - The bank's non-interest income has seen a reduction, but the decline is narrowing, suggesting a potential recovery in this area [3] Performance Summary - In H1 2025, the bank's operating income, pre-provision operating profit (PPOP), and net profit attributable to shareholders decreased by 5.76%, 6.78%, and 4.15% year-on-year, respectively [1][12] - Loan growth for H1 2025 was 4.20%, with corporate loans increasing by 8.4% while retail loans decreased by 7.05% [2] - The net interest margin for H1 2025 was reported at 1.69%, a decrease of 7 basis points from the previous quarter [2] Asset Quality - As of Q2 2025, the non-performing loan ratio was 1.36%, down 2 basis points from the previous quarter, while the overdue rate increased to 2.12% [2] - The bank's provision coverage ratio stands at 169.78%, reflecting a slight decrease [2] Non-Interest Income - Other non-interest income decreased by 10.7% year-on-year in H1 2025, but the decline rate has significantly narrowed compared to previous quarters [3][31] - The bank has increased its focus on realizing gains from its investment portfolio, contributing to a positive shift in net investment income growth [3] Financial Data and Valuation - The bank's total revenue for 2025E is projected at 64.98 billion, reflecting a year-on-year decline of 3.9% [4] - The estimated net profit for 2025E is 14.287 billion, down 5.9% year-on-year [4] - The bank's price-to-earnings (PE) ratio is projected to be 6.7 for 2025E, while the price-to-book (PB) ratio is expected to be 0.5 [4]