Stock Idea Ping An Bank: An attractive retail bank as C | FSMOne SG - Research Highlights

Stock Idea

Ping An Bank: An attractive retail bank as China transits to a domestic consumption-driven economy

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• Unlike the Big Four banks, Ping An Bank’s focus is on its retail business, which we believe will be its key earnings driver going forward.

• For its FY2021 results, PAB announced that it managed to deliver a set of strong results, recording a positive growth of 25.6% YoY in net income.

• We believe there is still untapped potential within the consumer credit space, a trend which PAB can benefit from.

• PAB’s wealth management segment is also expected to grow as wealthy investors are constantly looking for more avenues to park and grow their assets.

• The positive effects of investments in technology can be seen in PAB’s improved efficiency and lower cost-to-income ratio over the years.

• Based on a fair PB of 1.2X, we arrived at a target price of CNY 25.2, which represents an upside potential of over 70%.

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: Ping An Bank (SHE:000001)