AGRICULTURAL BANK OF CHINA(SH:601288) Ge Long Hui·2025-10-22 07:57Core Viewpoint - The A-share banking sector is experiencing significant gains, with Agricultural Bank of China (ABC) leading the charge, achieving a historical high in stock price and strong performance in the market [1][2][6]. Group 1: Stock Performance - Agricultural Bank's A-share price has risen over 58% year-to-date, reaching a total market capitalization of 2.83 trillion yuan, surpassing Industrial and Commercial Bank of China (ICBC) at 2.77 trillion yuan [6]. - ABC's stock price reached 8.09 yuan per share, marking a 14-day consecutive increase, while its Hong Kong shares also hit a record high with a 10-day consecutive rise [2][6]. Group 2: Dividend Yield - ABC maintains a stable and high dividend yield, which is a key attraction for long-term capital allocation. The dividend yields over the past five years were 5.79%, 6.30%, 7.11%, 6.10%, and 4.32%, significantly higher than the 10-year government bond yield of approximately 2.5% [9][10]. - The total cash dividend for 2024 is projected to reach 772.25 billion yuan, providing predictable cash flow for insurance funds [12]. 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 0.8%, and a net profit attributable to shareholders of 139.51 billion yuan, up 2.7%, making it the only major bank to achieve positive net profit growth [13]. - For the full year of 2024, ABC is expected to achieve a net profit of 282.7 billion yuan, with a year-on-year growth of 4.8% [14]. Group 4: Investment Interest - ABC has seen increased investment from insurance funds, with significant shareholding increases by Ping An Insurance, which raised its stake to over 20% by October 2025 [15][19]. - The main drivers of ABC's stock price increase are long-term institutional investors, including social security and insurance funds, attracted by its high dividend yield and low non-performing loan ratio of 1.2% [16]. Group 5: Market Outlook - The banking sector is expected to benefit from declining deposit costs and stable growth in intermediary business income, enhancing the attractiveness of bank stocks for long-term investors [17]. - Analysts suggest focusing on state-owned banks with strong fundamentals and high dividend yields, as well as regional banks with resilient economic performance and favorable valuations [18].