[ET Net News Agency, 20 October 2020] Morgan Stanley lowered its target price for
Postal Savings Bank of China (PSBC)(01658) to HK$4.8 from HK$7 and maintained its
"overweight" rating.
The research house believes the key concern on China banks has shifted from macro/NPL
risks to uncertainties from policy window guidance, which has reduced the chance of
excessive ROE at state-owned China banks when GDP growth and credit demand finally slows
in the future.
Morgan said PSBC has a stable retail funding base, which provides flexibility to capture
market opportunities. PSBC has avoided some higher-risk business segments and maintained a
cleaner balance sheet as a late market entrant. Morgan likes its leading position in
rapidly growing consumer lending markets and leading retail market share in higher-growth
central China and county/rural regions. (KL)