Investment Rating - The investment rating for the banking sector is "Positive" and is maintained [13]. Core Insights - The market sentiment has significantly improved since the beginning of the year, leading to substantial net outflows from major index funds like CSI 300 and SSE 50, with bank stocks experiencing the highest decline among primary sectors [2][6]. - Despite the recent pressure on bank stocks due to net outflows from index funds, there is an expectation that the market will continue to focus on high-quality bank stocks with stable or improving fundamentals, presenting good investment opportunities [2][8]. - The pricing power of fundamental factors for bank stocks is expected to increase in 2026, with a projected reversal in net interest income growth and stable performance from major banks [10]. Summary by Sections Market Dynamics - Since Q3 2025, bank stocks have been under pressure due to capital outflows, primarily from public funds and ETFs, reflecting a shift in institutional investor strategies [6][7]. - The net outflow from CSI 300 and SSE 50 ETFs reached 103.6 billion and 19.7 billion respectively during January 15-16, significantly above normal levels [7]. Valuation and Dividend Yield - Bank stocks are considered systematically undervalued under the PB-ROE framework, with current PB valuations below net asset value [9]. - The expected dividend yields for major state-owned banks have risen above 4%, with some leading banks like China Merchants Bank and Jiangsu Bank reaching yields of 5% to 6% [9][26]. Performance Outlook - Major banks are expected to maintain stable growth in 2026, with credit growth projected to be flat year-on-year, focusing on operational efficiency rather than scale [10]. - The non-interest income pressure from financial market activities has eased, and overall revenue growth is anticipated to be driven by net interest income [10].

Core Viewpoint - The leadership change at China Merchants Bank's credit card center marks a significant transition as Liu Jialong retires and Li Mingdong takes over, reflecting the evolving landscape of the credit card industry in China [1] Group 1: Leadership Transition - Liu Jialong, the former general manager of the credit card center, has retired and will serve as a consultant, having been a pivotal figure in the credit card industry since 1996 [1] - Li Mingdong, previously the general manager of the wealth platform department, has assumed the role of general manager of the credit card center, pending regulatory approval [1] Group 2: Industry Insights - Liu Jialong emphasized the importance of recognizing industry cycles, noting that in 2018, the bank anticipated a shift from a growth phase to a more stable market, leading to a reduction in expansion plans by one-third [2] - The credit card industry is transitioning from an incremental growth market to a more mature, stock-based market, necessitating strategic adjustments [2] Group 3: Future Strategies - Liu Jialong outlined a focus on risk management and sustainable growth, advocating for a dual approach of enhancing payment services and small loans while leveraging both branch and direct sales channels [3] - The strategy includes targeting key regions for customer acquisition and improving operational effectiveness to enhance customer value [3] Group 4: Li Mingdong's Background - Li Mingdong has extensive experience in retail finance and wealth management, having held various leadership roles within China Merchants Bank, including assistant president positions in multiple branches [4] - His background includes directorships in consumer finance and asset management, positioning him well to lead the credit card center [4]

Core Viewpoint - The international gold price has reached a historic high, exceeding $4,690 per ounce, leading to a surge in demand for gold and other precious metals, while the availability of bank safety deposit boxes has become critically low, especially in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen [1][7]. Group 1: Gold Price and Demand - The spot gold price increased by approximately 70% in 2025, driving a significant rise in consumer investment demand for gold bars and other precious metals [2][8]. - As demand for gold rises, the difficulty in renting safety deposit boxes has become more pronounced, with reports of waiting times extending up to five to six years for certain banks [1][8]. Group 2: Supply Constraints of Safety Deposit Boxes - The supply of safety deposit boxes is characterized by static growth, as banks primarily view this service as a means to maintain high-net-worth clients rather than a profit center, leading to limited resource allocation [2][5]. - High renewal rates and slow turnover of safety deposit boxes exacerbate the supply shortage, creating a rigid gap in availability [3][9]. Group 3: Bank Strategies and Challenges - Banks face challenges in increasing the supply of safety deposit boxes due to low profitability, high operational costs, and the expensive nature of building new secure storage facilities [5][11]. - Current strategies include optimizing existing resources and implementing technology upgrades to improve space utilization, but these measures are gradual and unlikely to resolve the supply-demand imbalance in the short term [6][12].

Core Viewpoint - The company, Lu Master (03601.HK), has entered into a structured deposit product agreement with China Merchants Bank, involving an investment of 50 million RMB [1] Group 1 - The agreement is established between Lu Master’s subsidiary, Chengdu Mijia You, and China Merchants Bank [1] - The investment of 50 million RMB is derived from the redeemed principal under a previous structured deposit product agreement [1]

Core Viewpoint - The company, Lu Master (03601), aims to utilize its idle funds to achieve better returns by entering into a structured deposit agreement with China Merchants Bank (600036) [1] Group 1 - The subsidiary Chengdu Mijia You has agreed to subscribe to a structured deposit product worth RMB 50 million [1] - The subscription funds are derived from the principal that has been redeemed under a previous structured deposit agreement [1]

Core Viewpoint - The company, Lu Master (03601), aims to utilize its idle funds to achieve better returns by entering into a structured deposit agreement with China Merchants Bank [1] Group 1 - The company announced that its subsidiary, Chengdu Mijia You, has signed a structured deposit product agreement with China Merchants Bank [1] - The agreement involves a subscription of RMB 50 million for the structured deposit product [1] - The subscription funds are derived from the redeemed principal under a previous structured deposit product agreement [1]

Market Overview - The Shanghai Composite Index rose by 0.29% on January 19, with 23 out of the 28 sectors experiencing gains. The top-performing sectors were basic chemicals and petroleum & petrochemicals, with increases of 2.70% and 2.08% respectively. Conversely, the computer and communication sectors saw declines of 1.55% and 0.96% respectively [1] - The net outflow of capital from the two markets was 35.714 billion yuan, with 13 sectors experiencing net inflows. The power equipment sector led with a net inflow of 7.597 billion yuan and a daily increase of 1.84%, followed by the basic chemicals sector with a net inflow of 1.331 billion yuan [1] Banking Sector Performance - The banking sector declined by 0.60% with a net outflow of 804 million yuan. Among the 42 stocks in this sector, 7 stocks increased while 28 stocks decreased. Notably, 15 stocks had net inflows, with the highest being Shanghai Pudong Development Bank, which saw a net inflow of 133 million yuan [2] - Major banks with significant net outflows included China Merchants Bank, Agricultural Bank of China, and Chengdu Bank, with outflows of 384 million yuan, 312 million yuan, and 146 million yuan respectively [2] Capital Flow in Banking Stocks - The top banking stocks by capital flow included: - Shanghai Pudong Development Bank: +0.72%, net inflow of 1.334 billion yuan - Industrial Bank: +0.00%, net inflow of 1.082 billion yuan - China Communications Bank: -0.73%, net inflow of 1.046 billion yuan - China Merchants Bank: -0.44%, net outflow of 384 million yuan - Agricultural Bank of China: -1.53%, net outflow of 312 million yuan [3]

Core Viewpoint - The recent leadership changes at China Merchants Bank (CMB) reflect a strategic shift in its retail banking operations, particularly in the credit card and wealth management sectors, amidst a challenging market environment for credit card businesses [1][15]. Leadership Changes - CMB announced the approval of the qualifications for two new assistant presidents, Cui Jiakun and Wang Xinghai, who will also serve as heads of the Beijing and Shenzhen branches respectively, resulting in a new executive structure of "one president, four vice presidents, and two assistant presidents" [1][15]. - Liu Jialong, the former general manager of the credit card center, will transition to a consultant role after years of leadership in the credit card sector [3][17]. - Li Mingdong, previously the general manager of the wealth platform department, is set to take over as the new general manager of the credit card center [5][19]. - Lu Xiaorong, the general manager of the retail financial headquarters, will also assume the role of general manager of the wealth platform department [7][21]. Credit Card Business Performance - As of mid-2025, CMB's credit card center reported total assets of 878.48 billion yuan, with 96.93 million active cards and 69.63 million active cardholders [8][22]. - The credit card transaction volume for the first half of 2025 was 2,020.96 billion yuan, showing a year-on-year decline of 8.54%, with interest income down by 4.96% and non-interest income down by 16.23% [9][23]. - The bank's market share in credit cards increased by 0.3 percentage points despite the overall decline in transaction volume, attributed to the slow recovery of the consumer market [9][23]. Wealth Management Growth - CMB's wealth management business has emerged as a new growth driver, with fee and commission income reaching 20.67 billion yuan in the first nine months of 2025, marking an 18.76% year-on-year increase [9][23]. - The total assets under management (AUM) for retail clients reached 16,597.523 billion yuan by the end of Q3 2025, reflecting an increase of 1,670.809 billion yuan or 11.19% from the previous year [10][24]. Branch Leadership Adjustments - Recent adjustments in branch leadership include Liu Wenjuan being promoted to assistant president of the Nanjing branch, and He Junqian's qualification as deputy president of the Wuhan branch being approved [11][27]. - He Fei, the former deputy general manager of the corporate finance headquarters, has been reassigned to the Shijiazhuang branch as party secretary and is expected to become the branch president [14][28].

Market Performance - The banking sector saw a slight increase of 0.03% on January 19, with CITIC Bank leading the gains [1] - The Shanghai Composite Index closed at 4114.0, up by 0.29%, while the Shenzhen Component Index closed at 14294.05, up by 0.09% [1] Individual Bank Performance - CITIC Bank closed at 7.70, with a rise of 1.18%, and a trading volume of 778,600 shares, amounting to a transaction value of 602 million yuan [1] - Other notable banks include: - Shanghai Pudong Development Bank at 11.12, up by 0.72%, with a transaction value of 811 million yuan [1] - Huaxia Bank at 6.46, up by 0.16%, with a transaction value of 300 million yuan [1] - Industrial Bank remained unchanged at 20.08, with a transaction value of 1.772 billion yuan [1] - Minsheng Bank decreased by 0.27% to 3.75, with a transaction value of 718 million yuan [1] Fund Flow Analysis - The banking sector experienced a net outflow of 41.31 million yuan from institutional investors, while retail investors saw a net inflow of 408 million yuan [1] - Specific fund flows for individual banks include: - Shanghai Pudong Development Bank had a net inflow of 143 million yuan from institutional investors [2] - CITIC Bank saw a net inflow of 55.12 million yuan from institutional investors [2] - Minsheng Bank experienced a net outflow of 603,920 yuan from institutional investors [2]

Core Viewpoint - The report from Guosheng Securities emphasizes that increasing the allocation of equity assets in bank wealth management is a crucial step towards achieving high-quality development in the capital market and fostering long-term patient capital [1]. Policy Collaboration Empowerment - A series of policies from multiple departments have been introduced to eliminate barriers and expand opportunities for bank wealth management equity investments, providing systematic institutional support across various dimensions such as market access, assessment mechanisms, and investment channels [1][2]. Transition Challenges - The bank wealth management sector faces structural challenges during the transition to equity asset allocation, primarily due to the requirements of the new asset management regulations and the mismatch between customer expectations and the nature of equity investments [3]. - The shift to net asset value management and the requirement for equity assets to be valued at market prices create a conflict with traditional customer perceptions of stable, low-volatility returns [3]. - Liquidity management and the inherent characteristics of assets further constrain the space for equity allocation, as short-term investment horizons do not align with the long-term nature of equity holdings [3]. Industry Value Enhancement - Enhancing the equity allocation capability of bank wealth management is not only a response to policy directives but also a key strategy for upgrading wealth management services, moving away from reliance on fixed-income products [4]. - The "fixed income + equity" product model is seen as a transitional focus that can enhance product returns while maintaining net value stability, aligning with the trend of wealth diversification among consumers [4]. - As the equity allocation ratio increases and research capabilities improve, banks are expected to transition from traditional fixed-income asset managers to comprehensive wealth service providers, creating new valuation opportunities for the banking sector [4][5]. Data Tracking - Weekly stock average trading volume reached 34,652.85 billion yuan, an increase of 6,131.62 billion yuan from the previous week [6]. - The balance of margin financing and securities lending increased by 3.73% to 2.71 trillion yuan [6]. - The issuance of non-monetary fund shares totaled 19.294 billion yuan this week, up by 111.03 billion yuan from the previous week [6]. Interest Rate Market Tracking - The issuance scale of interbank certificates of deposit was 552.88 billion yuan this week, an increase of 377.82 billion yuan from the previous week [7]. - The average yield on 10-year government bonds was 1.85%, a decrease of 3 basis points from the previous week [7]. - The issuance of special refinancing bonds this week totaled 38.876 billion yuan, with an average interest rate of 2.45% [7].