券商中国·2025-08-01 08:14Core Viewpoint - The Chinese banking sector is experiencing a significant rally, driven by optimistic forecasts regarding dividend sustainability and potential profit growth, particularly with the introduction of mid-term dividends by major banks in 2024 [2][3][4]. Summary by Sections Market Performance - On August 1, A-share banking stocks collectively surged, with Agricultural Bank of China reaching a historical high and Qingdao Bank rising over 5% [2][3]. - Other banks such as Ningbo Bank and Nanjing Bank also saw gains, indicating a strong market sentiment towards the banking sector [3]. Dividend Expectations - UBS expressed a positive outlook on the sustainability of dividends in the Chinese banking sector, noting that banks with dividend yields exceeding 4.2% for H-shares and 4.0% for A-shares are particularly attractive [3]. - Major banks like Industrial and Commercial Bank of China, Agricultural Bank of China, and China Bank are set to distribute mid-term dividends for the first time since their listings in 2024, contributing to the bullish sentiment [4]. Future Outlook - UBS forecasts that the fundamentals of the Chinese banking industry will improve from 2026, with expectations of revenue growth and recovery in net interest margins [6]. - The report anticipates a moderate increase in per-share dividends under a basic scenario, while also considering various credit cost scenarios [6]. - UBS maintains a "buy" rating for several H-share banks based on projected dividend yields of 5.1% to 5.4% for 2026, while downgrading some A-share banks due to lower yields [6]. Policy and Market Dynamics - The Shanghai Stock Exchange is actively promoting increased dividend distributions among listed companies, aiming to enhance investment value and attract investors [4]. - The collaboration of fiscal and monetary policies is expected to guide banks in optimizing credit structures and increasing lending, which may lead to substantial performance improvements in the banking sector by the second half of 2025 [4].