关注贷款率0.53%，较24Q1 略升1bp；逾期率0.70%，环比24Q1 上升3bp；24H1 不良净生成率0.62%，拨备覆盖率545.17%，拨备安全垫夯实，各指标保持优异，关注后续零售不良率趋势。（3）其他非息高增。24H1 其他非息收入同比增长28.32%，主要来自于交易性金融资产投资收益增加，投资收益同比增加55.40%。Core views:
The Bank of Hangzhou released its 2024 semi-annual report. Our comments are as follows: 24H1 revenue, PPOP, and profit to mother grew by 5.4%, 5.4%, and 20.1%, respectively. The growth rates changed by +1.86pct, +0.89pct, and -1.05pct respectively compared to 24Q1. In terms of performance drivers, growth in scale, other non-interest, and provision accruals have contributed positively. The narrowing of net interest spreads and pressure on income earnings have been the main drag.
Highlights: (1) The scale of credit has increased rapidly, and the growth rate of deposits has rebounded. 24H1 interest-bearing assets increased 13.8% year on year, while loans and investment assets remained high, up 16.5% and 16.1% year on year respectively. Public credit investment remained high, with an increase of 18.3% year over year. The incremental contribution still mainly came from the broader infrastructure and manufacturing industry. The growth rate of personal loans rebounded and remained steady overall. On the debt side, 24H1 deposits increased 13.9% year on year, and the growth rate rebounded 1.59pct from 24Q1. At the same time, active debt growth was higher to match asset side expansion. (2) Asset quality remains excellent. The defect rate at the end of 24Q2 was 0.76%, which remained flat for 6 consecutive quarters. Personal loan risks have been exposed. The non-performing ratio of 24H1 to public and retail loans was 0.76% and 0.76%, respectively, changing -8 bps and +17 bps from 23A, respectively. The non-performing ratio for personal consumption loans and operating loans increased by 22 bps and 22 bps, respectively, compared to 23A.
Focus on the loan ratio of 0.53%, slightly up 1 bp from 24Q1; the overdue rate of 0.70%, up 3 bps from 24Q1; the net non-performing generation rate of 24H1 is 0.62%, provision coverage rate is 545.17%, provision safety pads are strong, and all indicators remain excellent, and pay attention to the subsequent retail defect rate trend. (3) High growth in other non-interest rates. 24H1's other non-interest income increased 28.32% year over year, mainly due to increased investment income from transactional financial assets, and investment income increased by 55.40% year on year.
Concern: (1) Interest spreads continue to narrow, and deposit costs have improved significantly. The 24H1 spread was 1.42%, down 8 bps from '23. On the asset side, the yield on 24H1 interest-bearing assets decreased by 21 bps compared to 23, with the return on loans falling 35 bps from 23, and the return on investment assets falling 26 bps from 23, mainly affected by changes in the macroeconomic situation and LPR cuts; on the debt side, the 24H1 interest-bearing debt cost ratio decreased by 10 bps compared to 23, of which the deposit cost ratio decreased by 15 bps, mainly due to the company's reasonable adjustment of the debt structure to seize market opportunities and reduce the price of various types of deposits several times during the period to effectively control debt costs. (2) Revenue growth is under pressure. 24H1's net revenue from fees and commissions decreased by 9.9% year on year. Among them, commissions for escrow and other fiduciary services decreased 10.05% year over year, mainly due to a decrease in financial management fee revenue.
Profit forecast and investment advice: The net profit growth rate of the company in 24/25 is expected to be 20.38%/18.29%, EPS is 2.80/3.34 yuan/share, respectively. The current stock price corresponds to 24/25 PE 4.73X/3.97X, respectively, and the corresponding 24/25 PB is 0.74X/0.64X, respectively. Taking into account the company's historical PB (LF) valuation center and fundamentals, maintain the company's reasonable value of 17.98 yuan per share, corresponding to the 24-year PB valuation of about 1.0X, maintaining a “buy” evaluation grade.
Risk warning: (1) the quality of retail assets deteriorated due to a decline in economic growth exceeding expectations; (2) deposit costs rose above expectations; (3) interest rate fluctuations exceeded expectations; (4) policy regulation exceeded expectations.
