\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Medium scale urban commercial banks have better corporate governance Bank Of Hangzhou Co.Ltd(600926) was established in 1996 and was jointly initiated by the shareholders of 33 urban credit cooperatives, credit unions and Hangzhou Finance Bureau in Hangzhou. By the end of September 2021, the total asset scale was 1.33 trillion, ranking sixth among the 17 Listed urban commercial banks Bank Of Hangzhou Co.Ltd(600926) has a diversified shareholder structure of state-owned capital, private capital, foreign capital, institutional and public capital, checks and balances each other and jointly supports the development of the company, laying a solid foundation for corporate governance. Hangzhou Finance Bureau and its persons acting in concert hold a total of 23.55% of the shares of the company. The background of local state-owned assets has brought more project resources and financial support to the company, and the bank government cooperation has achieved rapid development. Recently, the proportion of state-owned assets in Hangzhou has increased due to the investment shares of Hangzhou urban investment and Hangzhou stock exchange. It is expected that the bank government cooperation will be closer, which is expected to improve the company’s location advantage.
Regional economic growth potential is obvious Bank Of Hangzhou Co.Ltd(600926) deeply covers Zhejiang, with a high market share. Zhejiang’s economy continues to improve and the demand for credit is strong, which provides favorable soil for the company’s operation. At the same time, the planning and implementation of national strategies such as Zhejiang common prosperity demonstration zone is expected to drive more investment and financing needs of key projects. With the transfer of shares of Commonwealth Bank of Australia by two state-owned enterprises, Hangzhou urban investment and Hangzhou exchange investment, it is expected that the support of local state-owned enterprise shareholders will increase, which is expected to further improve the company’s location advantages.
The company’s new round of strategy promotes the optimization of business structure and the improvement of efficiency Bank Of Hangzhou Co.Ltd(600926) the new five-year strategic plan (20212025) focuses on “strengthening the company, expanding retail and optimizing small and micro enterprises”. 1) Business: Bank Of Hangzhou Co.Ltd(600926) pay attention to the matching of national development strategy and its own resource advantages, and adhere to the credit extension to key industries and the real economy. At present, the company’s low-risk infrastructure loans account for a relatively high proportion, which can be used as a ballast to balance risk and income; At the same time, in view of the rich resources of science, technology, cultural and creative enterprises in Hangzhou, we have continuously innovated the service mode and served customers by means of investment loan linkage and venture capital cooperation. The differentiated competitive advantage of science, technology, cultural and creative finance has been continuously consolidated. 2) Retail business: Bank Of Hangzhou Co.Ltd(600926) consumer loan focuses on high-quality customers, realizes low risk and reasonable income, and is stable and sustainable. At the same time, the company has accelerated the layout of wealth management business, and the resulting medium income growth has potential. 3) Small and micro businesses: gradually extend to credit loans, and the comprehensive pricing of small and micro businesses is expected to increase.
With excellent asset quality and sufficient provision, there is room for continuous release of performance. With the improvement of the overall regional credit environment, the adjustment of customer structure and risk preference, and the improvement of the overall risk control ability, the quality of Bank Of Hangzhou Co.Ltd(600926) assets has continued to improve in recent years. From the perspective of forward-looking indicators, there is less pressure on the generation of potential non-performing assets in the future, and the asset quality is expected to maintain a better level in the same industry. Meanwhile, Bank Of Hangzhou Co.Ltd(600926) has maintained active provision provision in recent years. At present, the loan provision is very sufficient, the stock risk continues to be cleared, and there is room for continuous release of performance.
Investment suggestion: we believe that the credit demand of Bank Of Hangzhou Co.Ltd(600926) business area is strong, and the scale is expected to maintain rapid growth; The structure has room for optimization, and the net interest margin is expected to remain stable; With the development of wealth management business, Zhongshou has growth potential; With excellent asset quality and sufficient provision, the credit cost is expected to decline. It is predicted that from Bank Of Hangzhou Co.Ltd(600926) 2021 to 2023, the net profit attributable to the parent company will increase by 28.7%, 22.9% and 22.6% year-on-year respectively, and the BVPs will be 11.77, 13.56 and 15.77 yuan / share respectively. In the past two years, the center of Bank Of Hangzhou Co.Ltd(600926) Pb (LF) is about 1.19, and the average Pb (LF) of listed urban commercial banks is 0.8. Considering that Bank Of Hangzhou Co.Ltd(600926) has long-term growth and stability, we think it is reasonable to give a target valuation of 1.5 times of 2022 Pb, with the corresponding target price of 17.65 yuan, maintaining the “strongly recommended” rating.
Risk tip: the economic stall and downturn lead to the deterioration of asset quality; Unexpected changes in regulatory policies, etc
