Huan Qiu Wang·2026-02-04 05:08Core Viewpoint - The A-share banking sector has experienced a significant decline of 5.8% year-to-date, contrasting with a 1.1% increase in H-share Chinese banks, indicating a divergence in market performance [1] Group 1: Market Performance - The banking sector's performance has been weak, ranking last among 35 industries in the Wind secondary industry classification [1] - Despite the overall downturn, certain banks like Qingdao Bank and Ningbo Bank have shown strong performance, with increases of 19.87% and 9.29% respectively in January [2] - The average dividend yield for A-share banks remains at approximately 4.5%, which is higher than the 0.5%-2.0% returns of various risk-free assets, making bank stocks attractive for long-term investors [3] Group 2: Fund Flow and Market Sentiment - Since October 2025, there has been a cautious approach from funds towards the banking sector, leading to a period of consolidation [5] - Significant outflows have been recorded, with estimates showing that around 10% of the trading volume has been affected by net outflows from bank-related ETFs, totaling approximately 9111 billion yuan [6] - Despite short-term pressures, there is a belief that the fundamentals of the banking sector are improving, as indicated by increased institutional interest in bank credit issuance [6][9] Group 3: Long-term Opportunities - The banking sector is expected to see internal differentiation, with regional banks like Qingdao Bank and Ningbo Bank performing well against the backdrop of overall sector weakness [7] - Analysts predict that Qingdao Bank will maintain double-digit profit growth in 2026, supported by strong loan issuance capabilities and stable asset quality [8] - The demand for high-dividend assets remains strong, with expectations that insurance funds will inject over 2 trillion yuan into the market in 2026, further supporting bank stocks [9][10] Group 4: Investment Strategies - The current market adjustment reflects short-term fund disturbances, but the long-term outlook remains positive due to improving fundamentals [9] - Institutions are focusing on banks with strong asset quality and those that are improving their cost of liabilities and non-interest income [10] - The banking sector is anticipated to benefit from a stable dividend profile and recovery trading logic, especially as credit issuance continues to grow [10]