AGRICULTURAL BANK OF CHINA(SH:601288) Shang Hai Zheng Quan Bao·2025-10-21 09:54Core Viewpoint - The banking sector, led by Agricultural Bank of China, is experiencing a positive valuation recovery, with significant increases in stock prices and market capitalization, indicating a shift in investor sentiment towards bank stocks [1][2][5]. Group 1: Stock Performance - Agricultural Bank's stock price has reached new historical highs, recording a 13-day consecutive increase, with a closing price of 7.88 yuan per share on October 21 [3]. - The total market capitalization of Agricultural Bank has surpassed 2.76 trillion yuan, with a price increase of over 50% since 2025, outperforming the overall banking sector [2][3]. - The bank's A-share price-to-book ratio (PB) has crossed the 1.0 mark for the first time since March 2018, breaking the long-standing "below par" situation of state-owned banks [2][5]. Group 2: Financial Performance - For the first half of 2025, Agricultural Bank reported operating income of 369.94 billion yuan, a year-on-year increase of 0.85%, and a net profit attributable to shareholders of 139.51 billion yuan, up 2.7%, leading among the four major state-owned banks [4]. - The bank has strengthened its competitive advantage in rural markets, with a significant increase in "three rural" credit issuance, adding 916.4 billion yuan to county loans, bringing the total to over 1 trillion yuan [4]. Group 3: Market Trends and Analysis - Analysts suggest that the current market environment favors high dividend yields from quality assets, attracting capital inflows into the banking sector [2][4]. - The average dividend yield for A-share banks is approximately 4.39%, significantly higher than the 10-year government bond yield of 1.86%, creating a notable spread [4]. - Morgan Stanley's recent report highlights multiple factors supporting the revaluation of bank stocks, including upcoming dividend distributions, stable interest rates, and supportive financial policies [7].