Investment Rating - The investment rating for Postal Savings Bank is "Accumulate" with a target price of 7.14 CNY, while the current price is 5.08 CNY [6][12]. Core Insights - The report highlights that the bank's net interest income growth is gradually recovering, and the net income from fees and commissions is maintaining rapid growth. The bank plans to proactively lower the savings agency fee rate again in 2026, which is expected to support stable positive growth in performance [2][12]. Financial Summary - Revenue for 2024A is projected at 348,775 million CNY, with a growth rate of 1.8%. By 2028E, revenue is expected to reach 403,471 million CNY, with a growth rate of 4.9% [4]. - Net profit attributable to the parent company for 2024A is estimated at 86,479 million CNY, with a growth rate of 0.2%. This is expected to increase to 92,176 million CNY by 2028E, with a growth rate of 2.1% [4]. - The bank's net asset value per share (BVPS) is projected to be 8.37 CNY in 2024A and is expected to grow to 9.99 CNY by 2028E [4]. - The net asset return rate (ROE) is forecasted to decline from 8.7% in 2024A to 7.0% in 2028E [4]. Performance and Growth - The bank's performance in 2025 is characterized by a cumulative year-on-year growth in revenue and net profit of 1.99% and 1.07%, respectively, showing an improvement compared to the first three quarters of 2025 [12]. - The growth in net interest income is projected to be -1.57% for 2025, with a net interest margin of 1.66% [12]. - The net income from fees and commissions is expected to grow by 16.15%, driven primarily by wealth management and investment banking, which saw increases of 35.99% and 38.52%, respectively [12]. Cost Structure and Efficiency - The bank's business and management expenses are expected to decrease by 1.4% year-on-year in 2025, leading to a reduction in the cost-to-income ratio by 2.1 percentage points to 62.1% [12]. - The proactive adjustment of the savings agency fee rate is anticipated to save approximately 4.6 billion CNY, which represents 5.2% of the net profit for 2025, thereby enhancing profit performance and improving cost structure [12]. Asset Quality - As of Q4 2025, the non-performing loan (NPL) ratio is reported at 0.95%, with a coverage ratio of 227.94% [12]. - The bank's total assets, loans, and deposits are projected to grow by 9.35%, 8.25%, and 8.20% year-on-year, respectively, as of Q4 2025 [12].

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]