[ET Net News Agency, 1 February 2021] Credit Suisse lifted its target price for Postal
Savings Bank of China (PSBC) (01658) to HK$7 from HK$5 and maintained its "outperform"
rating.
The research house raised PSBC's 2020 profit growth to 2.7% (from 2.0%) to reflect
macroeconomic strength in 4Q. This compares with consensus at -1%. Credit Suisse expects
PSBC's profit growth to substantially recover in 2021, to further restore investor
confidence.
Credit Suisse said the bank's interest income was weak in 2020, but fee income grew fast
by 11% by 9M. Credit Suisse understands the bank will strive to unlock the potential in
the self-owned network to distribute more products to its clients in lower-tier cities.
This will boost the ratio of non-interest income in revenue and could be a future growth
driver. (KL)