Shang Hai Zheng Quan Bao·2025-10-21 18:17Core Viewpoint - Agricultural Bank of China (ABC) has shown strong stock performance, leading the banking sector's rebound, with a 13-day consecutive rise and a new historical high in stock price, indicating a positive valuation recovery in the banking sector [1][2][4] Group 1: Stock Performance - As of October 21, ABC's A-share price reached 7.88 yuan per share, with a market capitalization exceeding 2.76 trillion yuan, reflecting a year-to-date increase of over 50% [2][3] - ABC's A-share price-to-book ratio (P/B) surpassed 1 for the first time since March 2018, breaking the long-standing "below par" situation of state-owned banks [2][4] Group 2: Market Dynamics - Analysts suggest that the high dividend yield of quality assets, combined with stable performance, is attracting capital inflow into the banking sector [2][3] - The average dividend yield of the A-share banking sector is approximately 4.39%, significantly higher than the 10-year government bond yield of 1.86%, creating a notable spread [3][5] Group 3: Financial Performance - In the first half of 2025, ABC 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 [3] - ABC's focus on rural markets has strengthened its competitive advantage, with rural loans increasing by 91.64 billion yuan in the first half of the year, bringing the total to over 1 trillion yuan [3] Group 4: Valuation Recovery - The recent increase in ABC's P/B ratio signals a positive outlook for the banking sector, suggesting that investors are optimistic about the bank's operational prospects [4][5] - The banking sector has experienced multiple rounds of valuation recovery this year, with the average P/B ratio for 42 listed banks at 0.63 times, indicating a shift in market perception towards the long-term value of dividend assets [5]