Yin He Zheng Quan·2025-08-04 12:22Investment Rating - The report maintains a "Recommended" rating for the banking sector, highlighting its configuration value amidst positive macroeconomic policies and ongoing support for consumption and technology [5][37]. Core Insights - The banking sector has shown resilience, with the PB ratio at 0.73 times and a dividend yield of 4.09%, indicating strong potential for investment [5][28]. - The resumption of VAT on newly issued government bonds is expected to impact banks' income and asset allocation, leading to a decrease in actual comprehensive yields for various bonds [11][10]. - The implementation of interest subsidies for personal consumption loans and service industry loans is anticipated to benefit retail banking operations, stimulating credit demand [16][5]. Summary by Sections Latest Research Insights - The July Politburo meeting emphasized the need for sustained macroeconomic policy support, focusing on stabilizing employment, enterprises, and market expectations [7][8]. - The meeting also highlighted the importance of expanding domestic demand and supporting new productive forces, which could benefit retail and technology finance sectors [9][8]. Weekly Market Performance - The banking sector outperformed the market, with a decline of 0.84% compared to a 1.75% drop in the CSI 300 index [5][17]. - Among listed banks, Agricultural Bank (+2.43%) and Industrial and Commercial Bank (+1.74%) showed notable gains [18][5]. Valuation of the Sector and Listed Companies - As of August 1, 2025, the banking sector's PB ratio stands at 0.73, reflecting a 43.98% discount compared to the overall A-share market [28][5]. - The report lists several banks with strong performance potential, including Industrial and Commercial Bank (601398), Agricultural Bank (601288), and Postal Savings Bank (601658) [37][5]. Investment Recommendations - The report suggests that low-valued joint-stock banks and quality regional banks are gaining attention from active funds, with a focus on the effectiveness of domestic demand expansion policies [37][5]. - The overall positive accumulation of fundamental factors in the banking sector indicates a potential turning point in performance [37][5].