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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Postal Savings Bank of China Co., Ltd.    1658   CNE1000029W3

POSTAL SAVINGS BANK OF CHINA CO., LTD.

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China's Postal Savings Bank says some retail investors opt out of Shanghai listing

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12/04/2019 | 03:15am EST
Man walks out of a Postal Savings Bank of China branch in Beijing

Postal Savings Bank of China said investors had opted out of paying for 3% of shares on offer in its Shanghai listing - a rare development that underscores growing concerns over problems in China's banking system.

Worries about the health of China's banking sector have grown this year after regulators seized control of Inner Mongolia-based Baoshang Bank in May, citing serious credit risks. That was followed by the rescue of four other regional lenders by state and local governments, hitting investor sentiment towards the sector.

China's biggest bank by number of branches is seeking up to 28.45 billion yuan ($4 billion) in the first part of the share sale, which was 79 times oversubscribed - a low level as mainland Chinese share offerings are often thousands of times oversubscribed.

A greenshoe option of 15% of shares, which needs to be exercised within 30 days of listing, could take funds raised to $4.7 billion.

PSBC said in a statement late on Tuesday that nearly all of those who decided not take up allocated shares were retail investors.

Unlike other major IPO markets, in mainland China investors are not required to pay before getting an allocation. Underwriters of the share sale will pick up the unsold shares.

Dai Zhifeng, an analyst at Zhongtai Securities Co, said he saw the problem as one of general investor wariness towards banking stocks rather than a reflection of PSBC's financial health per se.

Some recently listed banks are trading below their issue price, he noted. Zheshang Bank Co Ltd has lost 8% since its Nov. 27 Shanghai debut.

"Although it is under pressure, PSBC's share price should stabilise after the greenshoe option kicks in," he said.

PSBC Chairman Zhang Jinliang promised investors in an online roadshow last week that underwriters will take on shares in the greenshoe option if the bank's shares below their issue price in their first 30 days of trade - a measure which would "reduce the shares' initial volatility and stabilise the price."

PSBC is only the fourth company in China's A-share market to include a greenshoe option, analysts said.

It is conducting the listing at the behest of the central bank which wants state-owned lenders to be more responsive to the rigours of capital markets.

By Cheng Leng and Engen Tham

Stocks mentioned in the article
ChangeLast1st jan.
CHINA ZHENGTONG AUTO SERVICES HOLDINGS LIMITED -5.12% 2.41 End-of-day quote.-13.31%
CHINA ZHESHANG BANK CO., LTD -0.49% 4.05 End-of-day quote.-1.46%
CHONGQING RURAL COMMERCIAL BANK CO., LTD. -2.99% 3.9 End-of-day quote.-2.26%
POSTAL SAVINGS BANK OF CHINA CO., LTD. 0.00%End-of-day quote.0.00%
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Financials (CNY)
Sales 2019 279 B
EBIT 2019 121 B
Net income 2019 59 957 M
Debt 2019 -
Yield 2019 4,70%
P/E ratio 2019 6,29x
P/E ratio 2020 5,71x
Capi. / Sales2019 1,68x
Capi. / Sales2020 1,57x
Capitalization 468 B
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 17
Average target price 5,35  CNY
Last Close Price 4,46  CNY
Spread / Highest target 59,9%
Spread / Average Target 19,9%
Spread / Lowest Target -5,91%
EPS Revisions
Managers
NameTitle
Xue Wen Zhang General Manager & Executive Director
Yue Jun Chen Chairman-Supervisory Board
Jin Liang Zhang Chairman
Hong Yao Executive Director & Vice President
Ting Mei Fu Independent Non-Executive Director