Changjiang Securities·2025-07-25 08:45Investment Rating - The investment rating for the banking sector is "Positive" and is maintained [13] Core Insights - As of the end of Q2 2025, the aggregate heavy allocation ratio of actively managed public funds to banking stocks reached 4.9%, an increase of 1.1 percentage points from the previous quarter, marking the highest level since Q2 2021 [2][6] - The report indicates a clear upward trend in the allocation ratio of public funds to banking stocks since 2023, although the absolute allocation remains relatively low. The shift in allocation direction in Q2 2025 is notable, moving from state-owned banks to high-quality city commercial banks and undervalued banks [2][8] - The report emphasizes that the unreasonable undervaluation of banking stocks is the core driver for potential price increases, rather than the mere under-allocation compared to index weights [10] Summary by Sections Public Fund Allocation Changes - The allocation ratio of actively managed public funds to banking stocks has shown a clear upward trend, reaching a new high since Q2 2021, despite economic expectations not reversing since 2022 [6][7] - In Q2 2025, there was a significant shift in allocation from state-owned banks to high-quality city commercial banks and undervalued banks, reflecting a defensive strategy and a search for higher dividend yields [8][9] Individual Bank Performance - City commercial banks saw a notable increase in allocation, with an estimated increase of approximately 5.3 billion yuan. Key stocks such as Hangzhou Bank, Jiangsu Bank, and Nanjing Bank were significantly increased in holdings [9][10] - The allocation ratio for low-valued joint-stock banks also exceeded expectations, increasing by 0.4 percentage points to 1.55%, indicating a focus on stocks with greater valuation recovery potential [10] Future Outlook - The report maintains a positive outlook on high-quality city commercial banks, predicting they can sustain a high return on equity (ROE) of 10% to 15% and stable profit growth, with potential for systematic revaluation [10]