BOCI Securities: Slightly lowers the target price of Postal Savings Bank to HKD 6.62, maintains "Buy" rating

BOCI International released a research report saying that Postal Savings Bank of China (01658) is currently valued at a price-to-book ratio that is too low. The current price implies a 2026 forecast price-to-book ratio of 0.48x. Given that its asset quality is excellent and its dividend payout ratio is stable, it should receive a higher price-to-book valuation. Based on an approximately 0.65x 2026 forecast price-to-book ratio, the target price has been slightly lowered from HK$6.84 to HK$6.62, and a “Buy” rating is maintained.

Postal Savings Bank’s Q4 2025 attributable net profit grew 1.7% year over year, slightly faster than the 1.2% growth rate in Q3. The bank believes this was mainly driven by growth in operating income, a slowdown in the decline of the net interest margin, and a reduction in operating expenses. As a result, full-year attributable net profit grew 1.1% year over year, and operating income also rose 1.9% year over year. Although the ratio of non-performing loans increased in Q4, it is still the lowest among its peers, while the provision coverage ratio remains at a high level.

(Editor: He Zhong)

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