Ping An Securities·2025-06-12 02:25Investment Rating - The report maintains an "Outperform" rating for the banking sector [1]. Core Insights - The report highlights the trend of high dividend investments in the banking sector, driven by low interest rates and a strong demand for asset allocation from insurance funds [5][26]. - It emphasizes the stability of dividends and the attractiveness of the banking sector for long-term capital inflows, particularly from insurance companies [26][27]. Summary by Sections 1. Review of Insurance Capital Investment in Banking Stocks - Historical trends show three waves of insurance capital investment in banking stocks in 2015, 2020, and 2024, driven by low interest rates, high premium growth, accounting changes, and regulatory guidance [8][12]. - Since 2020, insurance capital has shown a more moderate approach to equity stakes in banks, focusing on stabilizing earnings and securing dividends [5][8]. 2. Future Outlook - The banking sector's high dividend yield is appealing, with a static dividend yield ranking third among all industries as of 2024 [26][28]. - The collaboration between banking and insurance channels is significant, with insurance premium income from bank channels reaching 36.7% in 2023, enhancing the sales of insurance products [26][31]. 3. Stock Selection Strategy - Key factors for stock selection include dividend yield, transaction costs, and fundamental performance, with a focus on stable dividend rates and robust financial metrics [5][27]. - The report suggests that state-owned banks and certain regional banks are likely to be prioritized by insurance capital due to their stable dividend profiles [5][26]. 4. Investment Recommendations - The report recommends a "pro-cyclical and high dividend" investment strategy, highlighting the potential for insurance capital to become a new source of incremental investment in the banking sector [5][26]. - Specific banks are identified for investment based on their strong fundamentals and expected recovery in performance, particularly in the context of policy support [5][26].