Investment Rating - The report maintains a "Recommended" investment rating for the banking sector, expecting the industry index to outperform the benchmark index by over 5% in the next 3-6 months [24]. Core Insights - The introduction of new VAT regulations on bond interest income is expected to favor older bonds, as they remain exempt from VAT, thus enhancing their attractiveness and potentially driving up their prices [2][3]. - The banking sector's dividend yield is projected to be around 3.8% in 2025, significantly higher than the 10-year government bond yield of approximately 1.7%, highlighting the advantages of high-dividend assets in a declining interest rate environment [3][8]. - The report emphasizes the importance of strategic allocation within the banking sector, particularly focusing on state-owned banks and select regional banks with strong asset quality and dividend policies [8]. Summary by Sections Market Overview - The report notes a decline in major indices, with the Shanghai Composite Index down by 0.94% and the ChiNext Index down by 0.74% during the week of July 28 to August 3, 2025 [7]. - The average daily trading volume in the A-share market was 11,292.71 billion yuan, reflecting a decrease of 7.96% compared to the previous week [7]. Bond Market Impact - The new VAT regulations apply only to newly issued government bonds, local bonds, and financial bonds, while existing bonds continue to enjoy tax exemptions, making them more favorable for banks [2]. - The proportion of government and policy financial bonds held by major banks exceeds 70%, indicating a strong focus on these assets [2]. Investment Recommendations - The report suggests a diversified investment strategy focusing on high-dividend banks, particularly large state-owned banks and stable joint-stock banks like China Merchants Bank and CITIC Bank [8]. - It also highlights the potential for improved return on equity (ROE) in undervalued joint-stock banks, recommending attention to banks like Shanghai Pudong Development Bank [8]. Company Earnings Forecasts - The report provides earnings per share (EPS) and price-to-earnings (PE) ratios for key banks, with recommendations for several banks based on their projected performance [9]. - For instance, China Merchants Bank is expected to have an EPS of 5.86 yuan in 2025 with a PE ratio of 7.58, indicating a strong investment case [9].

Investment Rating - The industry rating is "Positive" (maintained) [6] Core Insights - The profitability of China's banking FICC business remains considerable, with a pre-tax total asset return on equity of approximately 3.35% as of 2024A, primarily driven by interest income [1][12] - The FICC business has experienced a decline in yield over the past five years, with interest rates decreasing by about 50 basis points [2] - Future projections indicate a potential decline in asset return on equity to 1.61% in five years, a decrease of 174 basis points compared to 2024 levels [3] Current Profitability of China's Banking FICC Business - The current yield structure shows that interest income contributes 3.10%, capital gains 1.61%, and exchange gains 0.18% to the total asset return [12][13] - The financial market business ROA is 0.98%, significantly higher than the overall banking ROA of 0.75% [1][13] - Notable performers in the FICC business include banks like China Merchants Bank and Changshu Bank, with post-tax net returns exceeding 2.0% [13] Historical Profitability Changes - Over the past five years, the FICC business yield has consistently remained above 3%, with a notable decline in interest income during the interest rate reduction cycle [2][34] Future Profitability Outlook - Projections suggest that the financial market business ROA may drop to 0.44% in five years, reflecting a significant decrease in profitability [3] Characteristics of U.S. Banking FICC Business in Low-Interest Rate Periods - U.S. banks expanded bond holdings during the initial low-interest phase, but FICC income still declined, with a 0.5 percentage point drop in income share from 2008 to 2012 [4] - Strategies employed by JPMorgan included shortening bond durations and increasing allocations to credit and overseas bonds [4] Recommendations for China's Banking FICC Business - Increase the proportion of bond assets in OCI accounts, which currently stands at 28.4%, below the U.S. average of 42.5% during low-interest periods [5] - Focus on enhancing the allocation of credit and overseas bonds, as well as improving risk hedging practices to mitigate potential losses from rapid interest rate increases [5] Investment Suggestions - The report suggests adopting a bullish mindset towards bank stocks, emphasizing the importance of stock selection within the context of a long-term bullish trend driven by low interest rates and the revaluation of RMB assets [7]

Group 1 - The State Taxation Administration has intensified the crackdown on tax evasion by online anchors, with over 360 cases investigated since 2021, resulting in tax recovery exceeding 3 billion yuan [1] - The People's Bank of China conducted a reverse repurchase operation of 789.3 billion yuan, with a net injection of 601.8 billion yuan, the second-highest this year, to address liquidity pressure and rising funding rates [1] Group 2 - Several rural commercial banks in Hunan have adjusted ATM service rules, prohibiting withdrawals using other bank cards from midnight to 6 AM, as a measure against fraud [2] - The People's Bank of China and the General Administration of Customs are seeking public opinions on optimizing the cross-border cash transport process for the renminbi [2] Group 3 - Hong Kong's banking sector is preparing for the implementation of the Stablecoin Ordinance, which requires stablecoin issuers to select licensed banks for asset custody, leading to increased competition among banks for custody services [3] - Ruifeng Bank successfully issued 300 million yuan in technology innovation bonds, with a low coupon rate of 1.77%, aimed at supporting technology innovation [4] Group 4 - Agricultural Bank of China has made personnel adjustments in its technology sector, appointing new executives to enhance its digital transformation efforts [5] - Many banks have emphasized growth and risk management in their mid-year meetings, focusing on increasing revenue, optimizing asset-liability structures, and enhancing digital transformation [5][6]

Core Viewpoint - The issuance of technology innovation bonds (科创债) by small and medium-sized banks has significantly increased, with a total scale exceeding 230 billion yuan, reflecting a strong response to national policies aimed at supporting technological innovation and capital market integration [1][2][3]. Group 1: Market Dynamics - Since July, nine city commercial banks have actively participated in the issuance of technology innovation bonds, contributing to a total issuance scale of 168 billion yuan [1][2]. - As of July 28, 30 banks have issued or plan to issue technology innovation bonds, with a total scale reaching 235.8 billion yuan [3]. - The launch of the "technology board" in May has encouraged banks and wealth management companies to engage in the underwriting and investment of technology innovation bonds [1][3]. Group 2: Bank Strategies - Small and medium-sized banks are leveraging technology innovation bonds to access long-term, low-cost funding from capital markets, which can be directed towards technology-oriented enterprises [4][5]. - The issuance of technology innovation bonds allows banks to enhance their financial support capabilities for strategic emerging industries and technology enterprises [4][5]. - Compared to larger banks, small and medium-sized banks focus more on regional and customized services for early-stage financing needs of local technology enterprises [4][5]. Group 3: Investment Trends - Wealth management companies are increasingly investing in technology innovation bonds, viewing them as innovative investment targets that offer stable returns and policy benefits [8][9]. - The first batch of technology innovation bond ETFs has been launched, with banks like Bohai Bank and Tianjin Bank actively participating in these investments to channel more funds into the technology sector [9]. - The investment enthusiasm for technology innovation bonds is attributed to their favorable risk-return profile compared to other financial instruments, making them attractive to conservative investors [8][9].

Investment Rating - The industry investment rating is "Positive" and maintained [12] Core Viewpoints - In 2023, cyclical bank stocks have generally lagged in performance and are at historically low valuations. The market is beginning to focus on which cyclical bank stocks currently offer attractive value for investment [2][6] - The report highlights three categories of banks worth attention: stable performance small and medium-sized rural commercial banks, city commercial banks with improving retail asset quality, and undervalued joint-stock banks [2][6] Summary by Sections Small and Medium-Sized Rural Commercial Banks - Changshu Bank has significantly lagged behind the sector in 2023, with a valuation of 0.77x 2025 PB, at a historical percentile of 24%. Despite concerns over retail credit demand, the bank's operational performance remains strong, with a revenue growth of 10.1% and a net profit growth of 13.6% in the first half of 2025 [7] - Ruifeng Bank, another leading rural commercial bank in Zhejiang, has a valuation of 0.56x 2025 PB, also under pressure from pessimistic economic expectations. However, it is expected to maintain double-digit credit growth under its strategic initiatives [8] City Commercial Banks - Ningbo Bank, with a valuation of 0.80x 2025 PB, has seen a significant decline in its stock price since 2023. The bank's retail loan quality is improving, and if economic expectations rise, there is potential for valuation recovery [9] - Changsha Bank, which focuses on consumer finance, has a low valuation of 0.56x 2025 PB and has underperformed compared to peers. A recovery in economic expectations could enhance its valuation [9] Joint-Stock Banks - Ping An Bank's valuation is at 0.52x 2025 PB, significantly lower than its peers. The bank has experienced a decline in performance due to strategic adjustments by its new management. If real estate policies improve and economic expectations rise, there is potential for revaluation [10]

Core Viewpoint - The successful issuance of 300 million yuan in technology innovation bonds by Ruifeng Bank marks a significant entry of small and medium-sized banks into the technology bond market, reflecting a broader trend of financial institutions supporting technological innovation [2][3]. Group 1: Issuance Details - Ruifeng Bank announced the issuance of 300 million yuan in "2025 Zhejiang Shaoxing Ruifeng Rural Commercial Bank Technology Innovation Bonds," which are 5-year fixed-rate bonds with a coupon rate of 1.77% [3]. - The funds raised will be directed towards technology sectors as outlined in the "Financial 'Five Major Articles' Overall Statistical System (Trial)," including technology loans and investments in bonds issued by technology innovation enterprises [3]. Group 2: Market Context - As of now, 32 banks have issued technology innovation bonds, with a total issuance exceeding 230 billion yuan, although participation from rural commercial banks has been limited to a few, including Qingdao Rural Commercial Bank, Chengdu Rural Commercial Bank, and Ruifeng Bank [3]. - In June, seven small and medium-sized banks issued technology innovation bonds, indicating a shift in the market as these banks become key players in financing technological innovation [4]. Group 3: Strategic Implications - The active participation of small and medium-sized banks in issuing technology innovation bonds is seen as a strategic adjustment to support local technological innovation and optimize their funding structures [4]. - Analysts believe that allowing banks to issue technology innovation bonds will help guide long-term funds from social security and insurance into the technology sector, enhancing the overall financing landscape [4]. Group 4: Benefits for Small Banks - Issuing technology innovation bonds allows small and medium-sized banks to broaden their financing channels and reduce funding costs, which in turn supports local technology enterprises [5]. - Additionally, this participation enhances the brand influence and capital market business growth for these banks [5].

证券代码：601528 证券简称：瑞丰银行 公告编号：2025-017 浙江绍兴瑞丰农村商业银行股份有限公司 关于 2025 年科技创新债券发行完毕的公告 浙江绍兴瑞丰农村商业银行股份有限公司（以下简称"本行"或"公司"） 董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述或者重大遗 漏，并对其内容的真实性、准确性和完整性承担法律责任。 经中国人民银行《准予行政许可决定书》（银许准予决字〔2025〕第 24 号） 批准，本行近日在全国银行间债券市场成功发行"2025 年浙江绍兴瑞丰农村商 业银行股份有限公司科技创新债券"（以下简称"本期债券")，并在银行间市 场清算所股份有限公司完成债券的登记、托管。 本期债券于 2025 年 7 月 22 日簿记建档，并于 2025 年 7 月 24 日在全国银行 间债券市场发行完毕。本期债券发行规模为人民币 3 亿元，品种为 5 年期固定利 率债券，票面利率为 1.77%。 本期债券募集的资金将依据适用法律和监管部门的批准，投向《金融"五篇 大文章"总体统计制度（试行）》中规定的科创领域，包括发放科技贷款、投资 科技创新企业发行的债券等，专项支持科技创新领域业务 ...

Core Viewpoint - The article highlights the increasing interest of institutional investors in listed banks, particularly focusing on loan allocation, interest margin trends, and capital replenishment strategies. Group 1: Investor Engagement - Multiple listed banks, including Jiangsu Bank, Suzhou Bank, and Ningbo Bank, have engaged in investor relations activities, discussing key issues with investors [1] - As of July 12, 2023, 26 listed banks have been surveyed by institutions, totaling 230 instances of engagement, primarily among small and medium-sized banks [1][3] - Changshu Bank received the highest number of surveys at 33, while Ningbo Bank attracted the most institutions, with 195 participating [3][4] Group 2: Interest Margin Trends - The interest margin remains a hot topic among institutions, with the net interest margin for banks reported at 1.43% in Q1 2025, a year-on-year decrease of 0.11 percentage points [4] - Jiangsu Bank aims to maintain a net interest margin that outperforms peers by enhancing asset research capabilities and managing loan interest rates [5] - Changshu Bank plans to consolidate its interest margin advantage by optimizing both asset and liability sides, focusing on high-yield assets and controlling high-cost deposits [6] Group 3: Capital Replenishment - Capital replenishment is another key focus for investors, with regulatory updates from the Financial Regulatory Bureau regarding advanced capital measurement methods [8] - Ningbo Bank is actively researching regulatory requirements and plans to issue up to 45 billion yuan in capital bonds [8] - Suzhou Bank reported a successful conversion of nearly 5 billion yuan in convertible bonds, enhancing its capital strength [9] - Su Nong Bank intends to issue up to 1 billion yuan in secondary capital bonds to support its operations [9]

Investment Rating - The report maintains a "Recommended" investment rating for the banking sector, expecting the sector index to outperform the benchmark index by more than 5% in the next 3-6 months [24]. Core Insights - The report highlights the recent revisions to the CIPS (Cross-border Interbank Payment System) rules, which aim to enhance the management of participants and adapt to the growing cross-border e-commerce trade, projected to reach approximately 2.71 trillion yuan in 2024, a 14% year-on-year increase [3][4]. - The CIPS system processed 8.2169 million transactions amounting to 175.49 trillion yuan in 2024, reflecting a significant year-on-year growth of 42.60% [3]. - The report emphasizes the flexibility introduced in the new CIPS rules, allowing financial market infrastructure participants to open CIPS accounts based on business needs rather than strict management requirements [4]. Summary by Sections CIPS Overview - CIPS is a clearing system for cross-border payments in RMB, distinct from SWIFT's messaging system, and has seen a substantial increase in participation, with 174 direct participants and 1,509 indirect participants across 120 countries [2][3]. Recent Developments - The new rules include relaxed entry conditions for system participants, allowing for a more flexible approach to participant management [4]. - The rules specify that foreign direct participants must select domestic direct participants as fund custodians, as foreign banks lack CNAPS accounts [4]. Risk Management Enhancements - The updated regulations detail business processing and risk management requirements, mandating that participants establish robust risk management frameworks and adhere to international anti-money laundering standards [4]. Market Performance - The banking sector index rose by 3.77% during the reporting period, outperforming the CSI 300 index by 2.23 percentage points [8]. - The report suggests a focus on banks with high dividend yields and strong asset quality, recommending major state-owned banks and select regional banks for investment [9]. Company Forecasts - Key banks such as Ningbo Bank, Jiangsu Bank, and China Merchants Bank are highlighted with positive earnings forecasts and investment ratings, indicating strong potential for returns [10].

Group 1 - The A-share banking sector experienced a slight decline, with several banks such as Qingdao Bank, Su Nong Bank, Zhejiang Commercial Bank, and Ruifeng Bank dropping over 2% [1] - Other banks including Zhengzhou Bank and Chongqing Bank also followed the downward trend [1]