Investment Rating - The investment rating for Postal Savings Bank is maintained as "Add" [4] Core Views - The performance of Postal Savings Bank has shown a recovery with a 1H25 revenue growth of 1.5%, pre-provision profit growth of 14.9%, and net profit growth of 0.8%, all improving compared to 1Q25 [2] - The bank's net interest income decreased by 2.7% year-on-year, but the decline has narrowed compared to 1Q25. Net fee income increased by 11.6%, driven mainly by rapid growth in investment banking and wealth management [2] - Non-interest income grew by 25.2% year-on-year, primarily due to contributions from investment net income [2] - The adjustment of savings agency fee rates has led to a 5.2 percentage point decrease in business management fee rates [2] - Loan growth remains robust at 10.5% year-on-year, with total assets growing by 10.8% year-on-year [2] - The bank's core Tier 1 capital adequacy ratio improved to 10.52%, up 1.31 percentage points quarter-on-quarter, supporting future asset deployment [2] - The non-performing loan ratio stood at 0.92% at the end of 1H25, with a provision coverage ratio of 260%, down 5.8 percentage points quarter-on-quarter [3] - The forecast for net profit from 2025 to 2027 is adjusted to 882.47 billion, 905.1 billion, and 933 billion respectively, with year-on-year growth rates of 2.04%, 2.56%, and 3.08% [3][4] Summary by Sections Financial Performance - 1H25 operating revenue was 354.86 billion, with a growth rate of 1.74% expected for 2025 [4] - Net profit for 2025 is projected at 88.25 billion, with a growth rate of 2.04% [4] - The bank's net interest income for 2025 is estimated at 290.03 billion, with a slight decrease in interest income [4] Asset Quality - The non-performing loan generation rate increased slightly to 0.93%, with retail loan non-performing rates at 1.53% [3] - The bank's total loans are projected to reach 9,688.65 billion by the end of 2025 [4] Valuation Metrics - The price-to-book (PB) ratios for 2025, 2026, and 2027 are projected at 0.71, 0.66, and 0.62 respectively [3][4]