[ET Net News Agency, 18 January 2021] HSBC Global Research lifted its target price for
Postal Savings Bank of China (PSBC) (01658) to HK$5.8 from HK$5.3 and maintained its "buy"
rating.
The research house said PSBC shares now trade at 0.66x 2021 PB (4.5% below peer average)
and 6.1x 2021 PE (2.6% above peer average). HSBC noted a solid line-up of long term
institutional investors in the company, namely investor Himalaya Capital Investors, China
Shipbuilding Industry Corporation (CSIC), Shanghai International Port, Li Ka Shing, and
China Tobacco Group.
PSBC management targets >20% fee income growth for 2021. HSBC expects bancassurance and
mutual fund sales to accelerate. It also believes PSBC will likely attain
faster-than-peers loan growth in 2021 thanks to its low loan-to-deposit ratio, a
sequential improvement of loan demand as well as the banks'risk appetite on the retail
non-mortgage segment. (KL)