2024-10-31 06:37Investment Rating - The report assigns a rating of "Neutral" to Postal Savings Bank of China, indicating that the stock's total return over the next 12-18 months is expected to be in line with the return of its relevant broad market benchmark [6][10][12]. Core Insights - Postal Savings Bank of China reported a revenue increase of 0.5% year-on-year for Q3 2024, with profit before provisions rising by 8.8% and net profit attributable to the parent increasing by 3.5% [1][3]. - For the first three quarters of 2024, revenue grew by 0.1%, while profit before provisions decreased by 1.8%, and net profit attributable to the parent rose by 0.2% [1][3]. - The annualized Return on Assets (ROA) for the first three quarters of 2024 was 0.62%, down by 0.07 percentage points year-on-year, and the annualized Return on Equity (ROE) was 11.79%, down by 1.11 percentage points year-on-year [1][3]. - The Common Equity Tier 1 (CET1) capital ratio decreased by 0.04 percentage points year-on-year to 9.42% [1][3]. - The A-share 2024E Price-to-Book (P/B) ratio is 0.6x, the 2024E Price-to-Earnings (P/E) ratio is 6.0x, and the trailing twelve months (TTM) dividend yield is 5.0%, compared to industry averages of 0.6x, 5.4x, and 4.8% respectively [1][3]. Summary by Sections Revenue and Profitability - Q3 2024 saw a year-on-year increase in net interest income of 0.7%, with a cumulative increase of 1.5% for the first three quarters [2][4]. - The net interest margin for the first three quarters was 1.89%, slightly down from 1.91% in the first half of 2024 [2][4]. - The cost-to-income ratio for Q3 2024 was reported at 60.0%, reflecting a year-on-year increase of 0.8 percentage points [5]. Asset Quality - The non-performing loan (NPL) ratio increased by 3 basis points to 0.86%, while the special mention loan ratio rose by 10 basis points to 0.91%, and the overdue loan ratio increased by 5 basis points to 1.11% [2][5]. - The provision coverage ratio decreased by 23.7 percentage points to 301.9%, marking a continuous decline since the end of 2021 [2][5]. Fee Income - Net fee and commission income for the first three quarters of 2024 decreased by 12.7% year-on-year, showing improvement from a 16.7% decline in the first half of 2024 [2][5]. - Other net income increased by 0.5% year-on-year, although it showed a decline compared to the first half of 2024 [2][5].