Post Bank (601658): The Return of the King of Pratt & Whitney

Post Bank (601658): The Return of the King of Pratt & Whitney
Company Overview.The size of the Postal Savings Bank is the sixth largest state-owned commercial bank after the establishment of diplomatic relations between industry and peasants, but its compound growth rate of assets and liabilities and income and profits has remained at two figures in the past five years.The difference between Post Bank and the other five major banks lies in two points: 1) The network layout mode of “self-support + agency”.By cooperating with the controlling shareholder of the Post Group, the Postal Savings Bank has laid out the most extensive and deepest distribution network in the banking industry, and the deposits absorbed by agency outlets accounted for more than 75% of the total deposits.2) Differentiate positioning of retail banks.Postal Savings Bank is mainly positioned as “agriculture, rural areas and farmers”, urban and rural residents and small and medium-sized enterprises. The number of retail customers is second only to ICBC in the industry. The potential of retail business to contribute to the company ‘s profits has not yet been fully released.The retail business is expected to achieve a breakthrough from quantity to quality. Analysis of scale indicators.Assets and liabilities: The asset structure of PBC is mainly loans and bond investments. The proportion of loans is less than 50%, the proportion of deposits in liabilities is stable at more than 95%, and the ratio of deposits to loans is about 51%. Compared with the other five major banks, the average is 76%.The level of the deposit-to-loan ratio, and the deposit-to-loan ratio of the Postal Savings Bank has at least 25pct 北京夜网 room for improvement.Loans: Postal storage loan resources are continuously tilted towards the retail side, with the proportion of retail loans, and the proportion of high-priced personal business loans and consumer loans within the retail are higher than their counterparts.Deposits: Personal deposits accounted for more than 85% of postal deposits, the activation rate dropped slightly, and core debt had a clear advantage over the other five major banks.Investment: The company’s investment style is exceptionally stable, non-standard continuous pressure drops, and low-risk bonds account for more than 80%. Analysis of efficiency indicators.Profitability: From a horizontal perspective, compared with the other five major banks, there is still room for improvement in the postal savings bank ROA. Initially, benefiting from the positive impact of interest margin / non-interest, the company’s ROA has steadily increased in the past three years, and its marginal improvement has been obvious.Pricing: Benefiting from the optimization of asset structure, the company’s net interest margin in 16-18 years, the net interest margin are in the upward channel.From the perspective of loans, loan-to-deposit ratio and other indicators, compared with the peers, there is still room for potential optimization in the future asset end of the Postal Savings Bank.Under static calculations, if the proportion of loans to interest-earning assets in the 1H19 asset structure of the Postal Savings Bank increases to 57% / 66%, the company’s net interest margin will increase from 2.55% increased to 2.63% / 2.72%.Non-interest income: The percentage of postal deposits is small and the growth rate is fast. It has maintained an average annual growth rate of nearly 20% in the past five years, and it will increase space penetration in the future.Costs: Compared with the asset management expenses of the other five major banks, the cost income is relatively high, but the company’s management expenses show a certain scale effect, and the operating efficiency marginal improvement.Profit leverage: Benefiting from differential regulatory policies, equity leverage is higher, capital is fully utilized, and the company’s ROE is not inferior to peers. Asset quality and capital.Asset quality: From a horizontal perspective, the company’s asset quality ranks first among the six major banks in terms of nominal badness (defective ratio), potential badness (proportion of attention category), provision coverage ratio, and loan-to-loan ratio.Echelon level.The non-performing rate of less than 1% and the provision coverage rate of nearly 400% are due to the company’s long-term safety mat with reference to peers.Capital status: As of 9M19, the company’s capital adequacy ratio is more than 2pct higher than the industry regulatory bottom line. It will also be supplemented after the IPO. It is expected that the capital adequacy ratio will support business expansion in the next 2-3 years. Investment Advice.We believe that the company, as the sixth largest state-owned commercial bank, implements a self-employed + agency model to differentiate retail banks, retail customers, core debt, and average asset quality significantly with their peers. At the same time, the company isThere is still room for potential optimization, optimistic about the company’s future retail business to achieve a breakthrough from quantity to quality.The company’s EPS for 19-21 is expected to be 0.70, 0.80, 0.91 yuan; BVPS by the end of 2020 is 5.98 yuan.Corresponding to the closing price on December 30, the PE in 19-21 was 8 respectively.3x / 7.3x / 6.4x, corresponding to 0 PB at the end of 2020.97x, the first coverage to give a prudent overweight rating. Risk Warning: Unexpected Exposure Expected, Regulatory Policy Changes Exceeded Expectations, Economy Exceeded Expectations, Decline