HZBank(600926) 长江证券·2024-10-23 04:39Investment Rating - The report maintains a "Buy" rating for Hangzhou Bank (600926 SH) [3] Core Views - Hangzhou Bank's net interest margin is expected to stabilize, with asset quality remaining excellent [1] - The bank's interest income accelerated in Q3 2024, driving a 3 9% YoY increase in operating revenue [5] - Net profit attributable to shareholders grew 18 6% YoY in the first three quarters of 2024 [1] - The bank's non-performing loan ratio remained stable at 0 76% as of September 2024, with a provision coverage ratio of 543% [1] Financial Performance - Q3 2024 interest income growth accelerated to 11 0% QoQ, compared to 0 5% in H1 2024 [3] - Non-interest income grew 3 9% YoY in the first three quarters, though the growth rate slowed from 14 4% in H1 2024 [5] - Credit impairment losses decreased by 27% YoY, contributing to profit growth [5] - The bank's net interest margin was 1 42% in H1 2024, down 8bps from 2023 [1] Asset Quality - The bank's asset quality indicators remain industry-leading, with a stable NPL ratio of 0 76% [1] - Provision coverage ratio stood at 543% as of September 2024, down 2 percentage points QoQ [1] - Non-credit impairment provisions reached 11 8 billion yuan as of June 2024, providing potential for future profit release [6] Business Development - Total loans grew 12 8% YoY as of Q3 2024, with corporate loans and bills increasing 15 8% [6] - Retail loans grew 7 0% YoY, outperforming industry peers [6] - Deposit growth reached 12 6% YoY, with current deposits accounting for 40 2% of total deposits [6] Valuation and Projections - The bank's 2024E P B ratio is 0 78x, with the current stock price 5 1% below the convertible bond redemption price [5] - 2024 full-year revenue and net profit are projected to grow 3 1% and 18 0% YoY respectively [5] - The bank announced a 22 6% interim dividend ratio for 2024, consistent with 2023 [5] Industry Comparison - Hangzhou Bank's net interest margin of 1 42% in H1 2024 is lower than some peers like Bank of Nanjing (1 79%) and Bank of Ningbo (1 85%) [8] - The bank's provision coverage ratio of 543% remains significantly higher than many industry peers [8]