Core Viewpoint - Postal Savings Bank of China plans to establish a financial asset investment company (AIC) with a capital of 10 billion RMB, marking a significant expansion in the AIC sector as all six major state-owned banks will now have their own AICs [1][5][11]. Group 1: Company Actions - Postal Savings Bank's investment in the AIC is a response to national calls for enhancing financial services and supporting technological innovation and private enterprises [5][10]. - The establishment of Zhongyou Investment will increase the total number of bank-affiliated AICs in China to nine [5][11]. - The investment will be funded by the bank's own resources and is not expected to significantly impact its financial condition or operating results [8][10]. Group 2: Industry Context - The AIC sector has seen a revival after a long pause since 2017, with the recent approval of several banks to establish their own AICs, including Postal Savings Bank, which is the fourth bank to enter this field in 2025 [11][14][15]. - The AICs are designed to engage in debt-to-equity swaps and support related financial activities, contributing to the reduction of corporate leverage and enhancing financial stability [12][17]. - Since their inception, the five major state-owned bank AICs have seen a significant increase in net profits, growing from 1.15 billion RMB in 2018 to 18.35 billion RMB by the end of 2024, indicating a robust growth trajectory [16][19].

Core Viewpoint - The establishment of Zhongyou Financial Asset Investment Co., Ltd. by Postal Savings Bank marks the completion of the lineup of financial asset investment companies (AIC) under six major state-owned banks, enhancing the capacity for equity investment in the banking sector [1][2]. Group 1: Establishment and Regulatory Context - Postal Savings Bank plans to invest 10 billion yuan to establish Zhongyou Investment, following the regulatory approval for AICs issued by the National Financial Supervision Administration [1][2]. - The establishment of Zhongyou Investment will require regulatory approval and aims to adhere to legal and regulatory frameworks while focusing on risk management [2]. Group 2: Strategic Importance and Objectives - The investment is part of the bank's response to national calls for supporting technological innovation and enhancing comprehensive service capabilities, particularly in supporting private enterprises and the real economy [2][3]. - Other national commercial banks, including Industrial Bank, CITIC Bank, and China Merchants Bank, have also received AIC licenses, with registered capital of 10 billion yuan and 15 billion yuan respectively [2]. Group 3: Market Expansion and Challenges - The AIC pilot program has expanded from Shanghai to 18 cities, indicating a shift in the financial service paradigm from indirect financing to a combination of equity and debt [4]. - Challenges faced by AICs include limited capital sources, scarce investment targets, and difficulties in exit channels, which need to be addressed for effective operation [4][5]. Group 4: Future Development and Recommendations - Future development of AICs requires breakthroughs in institutional frameworks, capabilities, and ecological systems, including the establishment of long-term assessment mechanisms and diversified funding sources [6]. - It is recommended that banks enhance their investment decision-making and risk management processes while collaborating with local governments and state-owned platforms to explore diverse exit strategies [5][6].