[ET Net News Agency, 31 July 2019] Morgan Stanley raised its target price for Postal
Savings Bank of China (PSBC)(01658) to HK$6.4 from HK$6 and maintained its "overweight"
rating.
The research house said enhanced monetization of PSBC's 32,000 agency branches helps
support a higher and more sustainable ROE. New permission for credit business at agency
branches and changed mentality on technology will be key drivers.
Morgan has recently took a deep dive into PSBC's Suzhou branches, which provided strong
evidence with live successful cases. It now expects PSBC to improve ROE to 13.7% by 2021
(13.2% previously) and to maintain more stable ROE for three or four years longer than
other banks. (KL)