Huachuang Securities·2025-10-26 11:16Investment Rating - The report maintains a "Recommendation" rating for the banking sector, expecting the industry index to outperform the benchmark index by over 5% in the next 3-6 months [24]. Core Insights - The banking sector is transitioning from a "deposit-loan intermediary" to a key executor of national strategies and resource allocation hubs, focusing on five major areas: technology finance, green finance, inclusive finance, pension finance, and digital finance [2]. - The "14th Five-Year Plan" emphasizes the importance of financial system security, urging banks to balance profit-making with risk management while enhancing operational efficiency and service quality [3]. - The report highlights the need for banks to adapt to a more complex international competitive environment while prioritizing financial security and risk management in cross-border capital flows [3]. - The overall market performance shows a 1.40% weekly increase in the banking index, lagging behind the Shanghai Composite Index by 1.84 percentage points [7]. Summary by Sections Industry Overview - The banking sector's total market capitalization is approximately 1.15 trillion yuan, with a circulating market value of about 790 billion yuan [4]. - The report notes a 3.24% increase in the Shanghai Composite Index and a 2.88% increase in the Shanghai A-share market during the week [7]. Performance Metrics - The banking sector's absolute performance over the last month is 5.0%, with a relative performance of 2.8% compared to the benchmark [5]. - The report indicates a significant increase in the banking index over the past 12 months, with a relative performance of 24.4% [5]. Investment Recommendations - The report suggests a diversified investment strategy focusing on state-owned banks and stable joint-stock banks, highlighting the ongoing dividend plans and valuation improvement initiatives [8]. - Specific banks recommended for investment include China Merchants Bank, CITIC Bank, and Jiangsu Bank, among others, due to their solid fundamentals and growth potential [8][9].