Huachuang Securities·2026-01-12 14:52Investment Rating - The report maintains a "Recommended" rating for the banking sector, indicating an expectation that the sector will outperform the benchmark index by more than 5% in the next 3-6 months [25]. Core Insights - The average yield of bank wealth management products has been on a downward trend, with the average yield falling below the average personal deposit rate of listed banks for the first time since 2012. This trend is attributed to regulatory changes and market conditions [7][8]. - There is a potential for increasing the allocation of equity assets in wealth management products, which could enhance overall returns and attract more investors. Currently, equity products account for only 0.08% of the total wealth management product market, which has a total size of 31.63 trillion yuan [2][8]. - The banking sector is expected to see a systematic recovery in valuations in 2026, driven by a combination of improved fundamentals and capital inflows. The investment logic is shifting from pure defensive strategies to a dual focus on dividends and growth [8]. Summary by Sections Wealth Management Products - As of December 2025, the total market size of wealth management products reached 31.63 trillion yuan, with fixed income products making up 76.60%, cash management products 20.87%, mixed products 2.37%, and equity products only 0.08% [2]. - Regulatory bodies are exploring ways to facilitate greater equity market participation by wealth management funds, which could lead to an increase in the proportion of equity investments [2][8]. Company Earnings Forecasts and Valuations - Key companies in the banking sector have been rated as "Recommended" with projected earnings per share (EPS) and price-to-earnings (PE) ratios indicating potential for growth. For example, Ningbo Bank is projected to have an EPS of 4.33 yuan in 2025 with a PE ratio of 6.48 [3]. - The report highlights several banks, including China Merchants Bank and Jiangsu Bank, as having strong growth potential and favorable valuations, suggesting they are well-positioned for investment [3][8]. Market Performance - The report notes that the banking index underperformed the broader market indices, with a weekly decline of 1.90% compared to a 2.79% increase in the CSI 300 index [7]. - The report emphasizes the importance of monitoring market trends and the performance of individual banks to identify investment opportunities [5][8].