[ET Net News Agency, 12 June 2018] Goldman Sachs lowered its target price for Postal
Savings Bank of China (PSBC)(01658) to HK$6.4 from HK$6.6, and downgraded its rating to
"neutral" from "buy".
The research house said thinks the bank still has many strengths such as its strong
deposit franchise, superior asset quality and improving fee income. Goldman adjusted
PSBC's NIM by 1/-3/-10bp in 2018/19/20 to factor in the marginally loosening interbank
liquidity and its effect on NIM. The negative impact from NIM in future years is offset by
lower provision charges given Document #7, resulting in -5%/3%/5% of EPS change.
Goldman said the downgrade reflects (1) marginally loosening interbank liquidity going
forward (PSBC is a net interbank lender); (2) less attractive risk reward given PSBC's
relatively high P/B; and (3) lower capital adequacy ratio which may pose a limit to its
future loan/top line growth. (KL)
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01658 PSBC
Nominal 
4.100 +0.040 (+0.985%) Others
12/06/2018 11:25
[I-bank focus]Goldman downgrades PSBC (01658) to HK$6.4
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