\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 926 Bank Of Hangzhou Co.Ltd(600926) )
Core view
Regional economic advantages are obvious, providing broad space for the company’s business expansion Zhejiang Province and Hangzhou accounted for 23.6% of the total revenue in 2026. At the same time, actively seek development increment throughout the country, and have network layout in developed economic circles such as the Yangtze River Delta, the Pearl River Delta and the Bohai Bay. The regional economy of the company is developed and the demand for credit is strong. At the same time, the construction of the common prosperity demonstration area in Zhejiang Province is expected to stimulate the financing needs of relevant enterprises and personal credit needs, and provide broad incremental space for the company’s business expansion.
With good corporate governance and profound local state-owned assets background, promote a new round of strategy and improve business efficiency. The actual controller of the company is Hangzhou Finance Bureau. At the same time, other municipal state-owned enterprises hold shares. The management is stable, and the senior executives have a deep background in local government. The ownership structure dominated by state-owned capital has brought about the rapid development of bank government cooperation. At the end of 2021, the balance of infrastructure loans accounted for 56.2% of corporate loans. In addition, the company launched a new “20212025 development strategic plan”, taking strengthening the company as the ballast, expanding retail and optimizing small and micro enterprises as the growth pole, actively adjusting the business structure and further improving the operation efficiency.
Focus on the improvement of core competence, make efforts to build a “moat” of competition through science and innovation finance and small and micro finance. The rich scientific innovation and small and micro enterprises in the region provide rich fertile ground for Bank Of Hangzhou Co.Ltd(600926) business. The company continues to consolidate the comparative advantages of traditional business of scientific innovation finance, promote “cloud mortgage” and “Taizhou model”, expand small and micro finance, accelerate iterative standardized and online products, enable business advantages with digital words, and actively build a competitive “moat”. At the end of 2021, the balance of financing exposure of Bank Of Hangzhou Co.Ltd(600926) scientific and technological innovation enterprises reached 47 billion yuan, and the market coverage of enterprises listed on the internal medicine innovation board in the service business area exceeded 40%. From 2019 to 2021, the loan balance of small and micro financial lines grew at a compound annual rate of 24.0%, and the balance of “cloud mortgage” products grew at a compound annual rate of 28.3%, both of which achieved rapid expansion.
The asset quality is excellent. The new strategy promotes the improvement of business efficiency and will continue to grow at a high level in the future Bank Of Hangzhou Co.Ltd(600926) steady operation, active reduction of risk appetite, continuous adjustment of loan structure and continuous optimization of asset quality. The non-performing loan ratio at the end of 2021 was only 0.86%, and the provision coverage at the end of the period was as high as 568%, ranking first among listed banks, providing room for performance growth. Driven by the new round of strategy, the company’s asset liability structure has been continuously optimized, the proportion of retail loans and demand deposits has been increased, and the company’s operating efficiency has been further improved. In the future, driven by the traditional corporate business, science and innovation finance and large retail finance business, the company will continue to grow at a high level.
Profit forecast and Valuation: combining absolute valuation and relative valuation, we believe that the reasonable valuation range of the company’s stock is between 16.5-21.3 yuan, and the dynamic price to book ratio this year is 1.19-1.53 times, which has about 8% – 39% premium space relative to the current stock price of the company. Under the background of steady growth, we expect the company to maintain high growth. Considering the company’s valuation and regional economic development, we maintain the “overweight” rating.
Risk warning: changes in various factors may affect our judgment. See the text for details.
