Morningstar

Postal Savings Bank Of China Co Ltd Shs -H- Unitary 144A/Reg S 01658

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Stock XHKG Rating as of
HK$5.25 +0.13 (2.54%)
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As of Delayed Price Closed

Company Report

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China SOE Banks Earnings: Large Banks Lag Smaller Banks in NIM Recovery

Iris Tan

We maintain our fair value estimates for the state-owned enterprise banks in our coverage except for Agricultural Bank of China, which is seeing higher-than-expected net interest margins. We now increase ABC’s NIM assumption by 5 and 2 basis points in 2024 and 2025, respectively, which leads to a rise in fair value estimate to HKD 3.80 from HKD 3.50. Overall, there are no changes to our outlook for the other SOE banks.

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Price vs Fair Value

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01658 is trading at a 24% premium.
Price
HK$5.25
Fair Value
HK$9.50
Uncertainty
High
1-Star Price
HK$77.87
5-Star Price
HK$4.80
Economic Moat
Sjfk
Capital Allocation
Vswpvggm

Bulls Say, Bears Say

Bulls

PSBC has limited credit exposure to risky sectors. Low-risk loans, including infrastructure and home mortgages, represented less than half of total loan books.

Bears

PSBC's capital ratios are lower than SOE peers. Its common equity Tier 1 ratio was 9.34% as of mid-2024, 134 basis points above its minimum requirement.

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News

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Trading Information

Previous Close Price
HK$5.12
Day Range
HK$5.06–5.25
52-Week Range
HK$3.35–5.30
Bid/Ask
HK$5.25 / HK$5.26
Market Cap
HK$520.60 Bil
Volume/Avg
107.5 Mil / 50.3 Mil

Key Statistics

Price/Earnings (Normalized)
5.96
Price/Sales
2.11
Dividend Yield (Trailing)
5.45%
Dividend Yield (Forward)
5.45%
Total Yield
5.45%

Company Profile

Postal Savings Bank of China is headquartered in Beijing. The bank is the fifth-largest commercial bank in China by deposits and the sixth largest by assets. The bank was established in 2007 as the postal savings and remittance business of its parent, China Post Group. The bank completed its joint-stock reform in 2012. The bank got listed on Hong Kong and Shanghai stock exchanges in 2016 and 2019 respectively. It boasts over 600 million individual customers and more than 39,000 outlets, which are among the largest customer bases and distribution networks in China.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
192,922
Website
https://www.psbc.com

Competitors

Valuation

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Metric
01658
601988
601288
Price/Earnings (Normalized)
 5.966.847.19
Price/Book Value
 0.600.640.68
Price/Sales
 2.112.552.61
Price/Cash Flow
 —7.0711.81
Price/Earnings
01658
601988
601288

Financial Strength

Metric
01658
601988
601288
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 ———
Quick Ratio
No chart available

Profitability

Metric
01658
601988
601288
Return on Assets (Normalized)
 0.54%0.71%0.66%
Return on Equity (Normalized)
 10.90%10.36%11.13%
Return on Invested Capital (Normalized)
 ———
Return on Assets
01658
601988
601288

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