Investment Rating - The investment rating for Shanghai Bank is "Buy" (maintained) [9] Core Views - Shanghai Bank demonstrates steady growth in performance, with an increase in net interest margin quarter-on-quarter, and state-owned capital increase reflects long-term development recognition [1][3] - The bank's revenue and net profit for the first three quarters of 2025 grew by 4.0% and 2.8% year-on-year, respectively, with the growth rate of revenue slightly declining compared to the first half of 2025 [2][3] - The non-performing loan ratio remained stable at 1.18% as of the end of Q3 2025, while the provision coverage ratio improved by 11 percentage points to 255% [5] Summary by Sections Performance Overview - For Q1-Q3 2025, Shanghai Bank's revenue and net profit increased by 4.0% and 2.8% year-on-year, with the growth rates showing a slight decline and improvement compared to H1 2025 [2][3] - Key drivers included a decrease in the effective tax rate to 14.3% and a rise in other non-interest income by 14.7% year-on-year, attributed to a low base in Q3 2024 and realization of bond investment gains [3] - However, asset impairment losses increased by 11.1% year-on-year, and the growth of interest-earning assets slowed, with a year-on-year increase of 2.2% as of Q3 2025 [3] Net Interest Margin - The net interest margin for Q3 2025 rose by 7 basis points to 1.17%, primarily due to improved funding costs [4] - The asset yield decreased by 2 basis points to 2.73%, influenced by lower new loan rates and market interest rates, while the cost of liabilities fell by 10 basis points to 1.55% [4] Asset Quality - The non-performing loan ratio remained stable at 1.18%, with the attention loan ratio increasing by 4 basis points to 2.08% [5] - The provision coverage ratio improved by 11 percentage points to 255% as of Q3 2025 [5] Shareholding Changes - The largest shareholder, Shanghai United (controlled by Shanghai State-owned Assets Supervision and Administration Commission), increased its stake by 6.97 million shares, indicating confidence in the bank's future [6] Earnings Forecast and Valuation - The forecast for net profit attributable to shareholders for 2025-2027 is expected to grow by 3.12%, 4.29%, and 4.95%, respectively, with corresponding book values per share of 16.96, 18.46, and 19.72 yuan [7] - The target price is set at 14.22 yuan per share, corresponding to a price-to-book ratio of 0.84 for 2025, indicating a potential upside of 51% from the current price [7]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 12.02, corresponding to a 2025 target PB of 0.68 times [7][5]. Core Insights - The company has shown stable performance with a slight increase in profit growth, with a year-on-year increase in net profit and operating income of 2.8% and 4.0% respectively for the first nine months of 2025 [1]. - Non-interest income has demonstrated strong resilience, with a year-on-year growth of 10.1% in the first three quarters of 2025, driven by a significant increase in investment income [3]. - The company has improved its credit quality, with a stable non-performing loan (NPL) ratio of 1.18% and an increase in the provision coverage ratio to 255% [4]. Summary by Sections Financial Performance - For the first nine months of 2025, the annualized ROE and ROA were 10.04% and 0.74%, reflecting a slight decline of 0.35 percentage points and 0.01 percentage points year-on-year respectively [1]. - The company reported a net interest margin of 1.16% for the first nine months, benefiting from optimized funding costs [2]. Loan and Deposit Growth - As of September 2025, total assets, loans, and deposits grew by 2.5%, 2.0%, and 3.0% respectively compared to June 2025, indicating a slight acceleration in credit issuance [2]. - The company has focused on supporting the real economy, with significant growth in technology loans (16.3%), green loans (8.9%), and manufacturing loans (10.1%) [2]. Non-Interest Income and Taxation - The company’s non-interest income accounted for 31.9% of total revenue, with a year-on-year increase of 3.0 percentage points [3]. - The effective tax rate decreased significantly by 83.1% quarter-on-quarter, contributing positively to profit release [3]. Asset Quality and Provisions - The NPL generation rate improved slightly, with a quarterly NPL generation rate of 0.91%, down 83 basis points from the previous quarter [4]. - The company’s credit impairment has increased, with an annualized credit cost of 1.47%, reflecting a year-on-year increase of 15 basis points [4]. Valuation Metrics - The forecast for net profit for 2025-2027 is RMB 242 billion, RMB 253 billion, and RMB 268 billion, with corresponding year-on-year growth rates of 2.8%, 4.6%, and 5.9% [5]. - The estimated PB for 2025 is 0.53 times, compared to a peer average of 0.72 times [5].

Investment Rating - The report maintains an "Accumulate" rating for the company [3] Core Views - The company shows positive growth in both revenue and profit, with a revenue increase of 0.7% year-on-year in Q3 2025 and a net profit increase of 1.1% year-on-year [5] - The net interest margin has improved, with a quarter-on-quarter increase of 2 basis points to 1.24% in Q3 2025, supported by a decrease in the cost of interest-bearing liabilities [5][3] - The company is expected to maintain stable growth in loans and deposits, with a year-on-year increase in interest-earning assets of 10.3% and loans of 8.9% in Q3 2025 [5] Financial Performance Summary - Revenue and Profit Forecast: - Revenue (in million): 2023A: 584,236, 2024A: 582,657, 2025E: 578,582, 2026E: 587,318, 2027E: 595,271 [3] - Year-on-year growth rates: 2023A: 3.75%, 2024A: -0.27%, 2025E: -0.70%, 2026E: 1.51%, 2027E: 1.35% [3] - Net profit (in million): 2023A: 231,904, 2024A: 237,841, 2025E: 242,114, 2026E: 247,370, 2027E: 251,069 [3] - Year-on-year growth rates: 2023A: 2.38%, 2024A: 2.56%, 2025E: 1.80%, 2026E: 2.17%, 2027E: 1.50% [3] - Key Ratios: - Earnings per share (in yuan): 2023A: 0.76, 2024A: 0.78, 2025E: 0.75, 2026E: 0.84, 2027E: 0.85 [3] - Return on equity: 2023A: 10.83%, 2024A: 10.26%, 2025E: 9.82%, 2026E: 9.54%, 2027E: 9.01% [3] - Price-to-earnings ratio: 2023A: 7.32, 2024A: 7.14, 2025E: 7.45, 2026E: 6.66, 2027E: 6.57 [3] - Price-to-book ratio: 2023A: 0.74, 2024A: 0.68, 2025E: 0.71, 2026E: 0.62, 2027E: 0.58 [3] Asset Quality and Capital - The non-performing loan ratio remained stable at 1.24% in Q3 2025, with a slight increase in the non-performing loan generation rate [5] - The provision coverage ratio decreased slightly to 196.6% [5] - The core Tier 1 capital adequacy ratio improved by 1 basis point to 12.58% [5] Investment Recommendation - The company is recommended for stable growth, with projected price-to-book ratios of 0.71X, 0.62X, and 0.58X for 2025E, 2026E, and 2027E respectively [5] - The company is viewed as having a high margin of safety in valuation, with a high dividend yield and low valuation [5]

Investment Rating - The report maintains a "Recommended" rating for Hangzhou Bank (stock code: 600926) [1] Core Insights - Hangzhou Bank's revenue growth is on the rise, with a 3.9% year-on-year increase in H1 2025, and a net profit growth of 16.66% year-on-year. The annualized weighted average ROE stands at 19%, slightly down by 0.48 percentage points [4] - The bank has optimized its liability costs, resulting in a net interest income increase of 9.38% year-on-year in H1 2025, with a net interest margin of 1.35%, down 6 basis points from the beginning of the year [4] - The bank's asset quality remains strong, with a non-performing loan ratio of 0.76% as of June 2025, and a provision coverage ratio of 520.89%, which is leading in the industry [4] - The completion of the conversion of convertible bonds further strengthens the bank's capital base, enhancing its operational expansion and risk resistance capabilities [4] Financial Performance Summary - In H1 2025, the bank's revenue reached approximately 35,015.54 million yuan, with a projected growth rate of 6.33% for 2023 [43] - The net profit attributable to shareholders is expected to grow to 14,383.37 million yuan in 2023, reflecting a growth rate of 23.15% [43] - The bank's core tier 1 capital adequacy ratio is reported at 9.74% as of June 2025, indicating a robust capital position [4] Loan and Deposit Growth - Total loans increased by 7.67% year-to-date, with corporate loans growing by 12.41% and retail loans slightly declining by 2.12% [4] - Deposits rose by 5.17% year-to-date, with personal deposits increasing by 10.68% [4] Non-Interest Income and Investment Performance - Non-interest income decreased by 5% year-on-year in H1 2025, while investment income grew by 23.85% year-on-year [4] - The bank's wealth management products have expanded significantly, with a total scale exceeding 500 billion yuan, up 17% from the beginning of the year [4]

Investment Rating - The report maintains an "Overweight" rating for the banking industry in 2024 [2][4]. Core Insights - The banking sector experienced a dual decline in revenue and profit in Q1 2025, with a year-on-year revenue growth of +0.08% and a net profit growth of +2.35% for 2024, while Q1 2025 saw declines of -1.72% and -1.20% respectively [2][13]. - The report highlights a slowdown in loan growth, with corporate loans performing strongly while retail loans remain weak. The proportion of demand deposits has dropped to a historical low, indicating a shift towards time deposits [2][31]. - The net interest margin (NIM) decline has narrowed, and the pressure on the liability side has generally eased, contributing to a more stable banking environment [2][4]. - Retail non-performing loans (NPLs) have shown some disturbance, but provisions have been released to support profits, indicating a cautious approach to risk management [2][4]. Summary by Sections Revenue and Profit Trends - In Q1 2025, the revenue of listed banks declined by -1.72%, with city commercial banks showing resilience with a growth of +2.96% [14][19]. - The net profit for Q1 2025 saw a decline of -1.20%, with state-owned and joint-stock banks experiencing negative growth, while city and rural commercial banks reported positive growth [23][25]. Loan and Deposit Dynamics - Loan growth has slowed significantly, with total loans increasing by +7.94% in 2024 and +7.92% in Q1 2025, down from +11.14% in 2023 [31][36]. - The proportion of demand deposits has decreased to a historical low of 37.59% by the end of 2024, reflecting a shift towards time deposits across various bank categories [2][46]. Interest Margin and Profitability - The weighted average NIM for listed banks was 1.53% in 2024, a decrease of 0.16 percentage points from 2023, but the decline has slowed compared to previous years [2][4]. - The average return on equity (ROE) for listed banks was 10.35% in 2024, with a slight decline to 11.46% in Q1 2025, indicating stable profitability despite external pressures [28][29]. Investment Recommendations - The report suggests focusing on three main lines: high dividend, low valuation banks such as ICBC, ABC, BOC, and CCB; banks with regional advantages and strong performance like Chengdu Bank and Hangzhou Bank; and banks benefiting from real estate risk mitigation like China Merchants Bank [4][4].