PSBC’s Wealth Management Business the Major Growth Driver for Q2 Revenue

We retain our fair value estimate for no-moat-rated Postal Savings Bank of China, or PSBC, at CNY 6.30 per A-share and HKD 7.60 per H-share after the bank posted strong results. Total revenue and net profits grew 10.1% and 14.9%, respectively, year on year. Total revenue growth beat our assumptions for high-single-digit growth, driven by hefty growth in fee income which was partly offset by slowing interest income. The results reflected PSBC’s strong growth momentum in its rural lending and wealth management businesses, leveraging its 40,000 distribution outlets and 637 million retail customers across China.