EBSCN·2025-08-31 03:40Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of Postal Savings Bank, with current prices at 6.04 CNY and 5.41 HKD respectively [1]. Core Insights - The report highlights an increase in non-interest income contribution, with total revenue and net profit growth observed in the first half of 2025. Total revenue reached 179.4 billion CNY, a year-on-year increase of 1.5%, while net profit attributable to shareholders was 49.2 billion CNY, up 0.9% year-on-year [3][4]. Revenue and Profitability - Revenue growth improved sequentially, with non-interest income's share rising to 22.5%. The year-on-year growth rates for revenue, pre-provision operating profit (PPOP), and net profit attributable to shareholders were 1.5%, 14.6%, and 0.9% respectively, showing improvements from the first quarter [4]. - Interest income decreased by 2.7% year-on-year, while non-interest income grew by 19.1%, indicating a shift towards more diversified income sources [4][9]. Loan and Asset Management - As of the end of Q2, the bank's interest-earning assets and loans grew by 10.7% and 10.1% year-on-year, respectively, with a notable increase in loan issuance [5]. - The loan structure showed significant growth in corporate loans, particularly in sectors like water conservancy and public facilities, which accounted for 19.1% of the total increase [6]. Liability and Deposit Management - The growth rate of interest-bearing liabilities increased to 10.6%, with total deposits growing by 8.4% year-on-year. The bank has optimized its deposit management strategy to enhance low-cost funding [7]. Interest Margin and Cost Management - The net interest margin slightly narrowed to 1.7%, with asset yields declining due to lower interest rates on new loans and existing loan repricing [8]. - The bank's proactive cost management strategies have led to a reduction in funding costs, benefiting from lower deposit rates [8]. Non-Interest Income Growth - Non-interest income saw a substantial increase of 19.1% year-on-year, driven by growth in fees and commissions as well as other non-interest income sources [9]. Asset Quality - The non-performing loan (NPL) ratio remained low at 0.92%, with a slight increase from the previous quarter. The bank's asset quality indicators, including the NPL generation rate, showed stability [10][29]. Capital Adequacy - The bank successfully completed a 130 billion CNY A-share placement, enhancing its capital base. As of Q2, the core Tier 1 capital adequacy ratio improved to 10.52% [11]. Earnings Forecast and Valuation - The report maintains earnings per share (EPS) forecasts for 2025-2027 at 0.74, 0.75, and 0.78 CNY, with corresponding price-to-book (PB) ratios for A-shares at 0.79, 0.74, and 0.70 [12][33].