Shenwan Hongyuan Securities·2025-11-14 05:11Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the sector compared to the overall market performance [3][5]. Core Insights - The report highlights a continued slowdown in credit growth, with new social financing in October at 815 billion, a year-on-year decrease of 597 billion, and new loans at 220 billion, down 280 billion year-on-year [3][5]. - The report emphasizes a shift towards "quantity-price balance" and "efficiency first" as the new normal in the banking sector, driven by the central bank's focus on stabilizing net interest margins [5]. - The report suggests that the banking sector's net interest income growth is expected to improve as interest margins stabilize and recover in the coming year [5]. Summary by Sections Credit Growth - In October, credit continued to slow down, with a year-on-year decrease of nearly 300 billion. The total new loans from January to October amounted to 14.97 trillion, a decrease of 1.6 trillion year-on-year [5]. - Corporate general loans decreased by 160 billion, while bill discounting increased by over 500 billion, indicating a shift in lending strategies [5]. Retail Lending - Retail short-term and medium-to-long-term loan demands remain under pressure, with a net decrease of nearly 360 billion in October, reflecting ongoing deleveraging in the household sector [5][19]. Social Financing - New social financing in October was 815 billion, with a year-on-year decrease of 597 billion, and the stock of social financing grew by 8.5% year-on-year, with a slight decline in growth rate [5][6]. Monetary Supply - M1 grew by 6.2% year-on-year, with a decrease in growth rate of 1.0 percentage points, while M2 grew by 8.2%, with a decline in growth rate of 0.2 percentage points [9][6]. Investment Analysis - The report suggests focusing on leading banks and undervalued regional banks as key investment opportunities, with a positive outlook for banks with strong fundamentals and dividend yields [5][21].