Summary of Conference Call Notes Industry Overview - **Industry**: Chinese Banking and Property Sector - **Context**: Insights from the 2026 Greater China Conference (GCC) and subsequent macro, financial, and property tours Key Points on Economic Outlook - **2026 GDP Growth Target**: Expected to be set at 4.5-5.0%, with some experts optimistic about achieving close to 5% due to strong exports and easing deflationary pressures [2][8][10] - **Deflationary Pressure**: CPI expected to rise to 0.5%, while PPI may narrow its decline to a range of -1% to 0% [10] - **Consumption Growth**: Not seen as a key driver for 2026; trade-in subsidies are fading [2][19] Banking Sector Insights - **NIM Pressure**: Current stretched NIM levels are a constraint for rate cuts; a small rate cut of 10bps is anticipated [3][15] - **Loan Origination**: Decent loan origination observed in early January, primarily driven by corporate loans; retail loan recovery remains limited [5][48] - **Revenue Outlook**: Improved revenue outlook driven by less YoY NIM decline and ongoing fee income recovery; investment income may lag due to a less favorable bond market [5][50] Property Sector Outlook - **Bearish Sentiment**: Experts hold a bearish view on the property sector, expecting a 10% decline in property prices in 2026 and 5% in 2027 [4][27] - **Homebuyer Behavior**: Shift from buying to renting; potential 30-40% downside in property prices if rental yields align with mortgage rates [4][27] - **Policy Support**: Limited policy tools available to stabilize property prices; expectations for major new policies in 2026 are low [4][16][27] Specific Company Insights - **Chengdu MixC**: Strong sales growth with retail sales reaching approximately Rmb8.5 billion in 2025; proactive tenant changes attributed to outperformance [30] - **C&D Haiyao**: Luxury project demand remains, with a successful launch of a luxury residential project at an average price of over Rmb77,000 per sqm [31] Additional Considerations - **Geopolitical Risks**: Complicated geopolitical relations may impact export growth; however, solid external demand is expected [17] - **RMB Appreciation**: Potential for RMB to enter an appreciation cycle, with expectations of a 3-4% appreciation by the end of 2026 [18] - **Distressed Developers**: Many banks are allowing roll-over of existing project loans to distressed developers, delaying NPL recognition [22] Conclusion - The overall sentiment in the banking and property sectors is cautious, with expectations of limited growth and ongoing challenges. The focus remains on managing asset quality and navigating a complex macroeconomic environment.

Investment Rating - The report maintains an "Overweight" rating for the securities and banking sectors, while also recommending the insurance sector [8]. Core Insights - The market remains active with an average daily trading volume of 28 trillion yuan in A-shares, and the financing balance stabilizing at 2.7 trillion yuan. However, the ETF market has experienced significant volatility, with major outflows from core broad-based ETFs [11][16]. - The sentiment for market bullishness is strong, and the spring rally is expected to continue, particularly in the insurance sector where beta trading opportunities are anticipated [2][26]. - The central bank's governor indicated that there is still room for interest rate cuts, with the latest Loan Prime Rate (LPR) remaining unchanged for eight consecutive months [11][32]. Securities Sector Summary - The report highlights a positive outlook for the securities sector, with several brokerages reporting significant profit growth for 2025. The recommendation includes top brokerages such as CITIC Securities, Guotai Junan, and GF Securities [2][12]. - The average daily trading volume in the A-share market is noted at 28 trillion yuan, with a stable financing balance, indicating a recovery opportunity for the brokerage sector [11][12]. Insurance Sector Summary - The report suggests focusing on quality leading companies in the insurance sector, as the market sentiment remains strong and the spring rally is expected to continue [26][27]. - The insurance sector's fund holdings have increased, with major stocks like Ping An and China Life being highlighted for their significant market presence [27][31]. Banking Sector Summary - The banking sector is characterized by stable performance, with several banks reporting positive earnings forecasts for 2025. The report recommends quality individual stocks such as Nanjing Bank and Chengdu Bank [3][40]. - The central bank's comments on potential interest rate cuts and the expansion of wealth management products indicate a favorable environment for banks [32][33]. - The report notes a decline in bond allocations within bank wealth management products, with an increase in deposits and funds [37][34].

Investment Rating - The report maintains an "Overweight" rating for both the banking and securities sectors [6]. Core Insights - The financial sector shows a strategic allocation opportunity, with increased fund positions in banking, securities, and insurance stocks [1][5]. - The banking sector's fund position has slightly increased, indicating a return of risk appetite among investors [2][13]. - The securities sector is experiencing a recovery in fund positions, driven by market activity and performance expectations [3][5]. - The insurance sector has seen a significant increase in fund positions, with major insurance stocks being favored by investors [4][5]. Summary by Sections Banking Sector - As of Q4 2025, the banking sector's fund position increased by 0.04 percentage points to 1.89%, with large banks and joint-stock banks seeing gains, while city commercial banks experienced a decline [2][13]. - The top three heavy-weighted stocks in the banking sector account for 46.0% of the total fund position, indicating a concentration in holdings [13][27]. - The dividend yield for A/H shares in the banking sector is approximately 4.87%/4.88%, making it attractive compared to the 10-year government bond yield of 1.83% [5]. Securities Sector - The securities sector's fund position rose by 0.10 percentage points to 0.72%, although it remains at a historically low level [3][5]. - Major securities firms like CITIC Securities and Guotai Junan have been favored for their performance potential amidst market recovery [5][8]. - The average price-to-book ratio for large and small securities firms is 1.44x and 1.67x, respectively, indicating they are trading at 27% and 42% of their historical averages [5]. Insurance Sector - The insurance sector's fund position increased by 0.94 percentage points to 1.72%, with major stocks like Ping An and China Pacific receiving significant increases in holdings [4][5]. - The insurance index's price-to-book ratio is at 1.53x, which is at the 40th percentile of valuations since 2014, suggesting potential for valuation recovery [4][5]. - Strong sales performance in life insurance is noted, with a focus on high-elasticity stocks as key investment opportunities [4].

Investment Rating - The report maintains a "Strong Buy" rating for Ningbo Bank and Industrial Bank, expecting their stock prices to outperform the CSI 300 Index by over 20% within the next six months [38]. Core Insights - The People's Bank of China (PBOC) Governor Pan Gongsheng indicated that there is still room for interest rate cuts and reserve requirement ratio (RRR) reductions, with a commitment to continue a moderately loose monetary policy in 2026 [9][10]. - Ningbo Bank reported a year-on-year revenue growth of 8.01% and a net profit growth of 8.13% for 2025, with significant increases in intermediary business income by 30.72% and total assets growing by 16.11% [12]. - Industrial Bank's revenue and net profit showed slight increases of 0.24% and 0.34% respectively, with total assets surpassing 11 trillion yuan and a stable non-performing loan (NPL) ratio of 1.08% [12][13]. - The report highlights a recovery in bank holdings by active management funds, with a slight increase in the proportion of bank sector holdings to 1.06%, indicating potential for further investment [22]. Summary by Sections Monetary Policy - Pan Gongsheng emphasized the need for a flexible and effective use of monetary policy tools, including interest rate cuts and RRR reductions, to ensure liquidity remains ample and aligns with economic growth expectations [9][10]. Bank Performance - Ningbo Bank's strong performance is characterized by a low NPL ratio of 0.76% and a high provision coverage ratio of 373%, indicating robust risk management [12]. - Industrial Bank's performance is stable, with a focus on maintaining asset quality and a solid provision coverage ratio of 228% [12][13]. Market Trends - The banking sector saw a slight increase in active fund holdings, suggesting a potential recovery in investor confidence and interest in bank stocks [22]. - The report notes that the banking, securities, insurance, and fintech indices experienced declines, with the banking index down by 2.70% [23].

2026 年 01 月 26 日 双融日报 --鑫融讯 分析师：万蓉 S1050511020001 wanrong@cfsc.com.cn 市场情绪：73 分（较热） 最近一年大盘走势 资料来源：Wind，华鑫证券研究 -10 -5 0 5 10 15 20 25 30 (%) 沪深300 相关研究 ▌ 华鑫市场情绪温度指标：（较热） 华鑫市场情绪温度指标显示，昨日市场情绪综合评分为 73 分，市场情绪处于"较热"。历史市场情绪趋势变化可参 考图表 1 ▌ 热点主题追踪 今日热点主题：商业航天、银行、消费 1、商业航天主题：埃隆·马斯克正积极推进 SpaceX 的 IPO 计划，目标在今年 7 月前完成。作为行业标杆，其上市预期 极大地提振了全球市场对整个商业航天赛道的关注与信心。 另外，低轨轨道和频谱资源遵循"先占先得"的国际规则。 数据显示，可用轨位空间已十分紧张，中国已申请超 20 万颗 卫星的轨道频率，这直接倒逼各国加快卫星制造与发射节奏 以抢占资源，是行情核心驱动力。相关标的：中国卫星 （600118）、航天电子（600879） 2、银行主题：银行股具有高股息特性，如中证银行指数的股 息率高达 6. ...

Core Insights - The first batch of eight listed banks has reported positive earnings forecasts for 2025, with all banks achieving year-on-year growth in net profit, and seven of them also reporting revenue growth [1][2]. Group 1: Earnings Performance - All eight listed banks reported a year-on-year increase in net profit, with seven banks achieving both revenue and net profit growth, indicating a robust overall performance [2]. - Among the city commercial banks, Hangzhou Bank led with a 12.05% increase in net profit, while Ningbo Bank and Nanjing Bank reported growth rates of 8.13% and 8.08%, respectively [2]. - In the joint-stock banks category, Pudong Development Bank showed a notable net profit growth of 10.52%, while CITIC Bank, China Merchants Bank, and Industrial Bank reported increases of 2.98%, 1.21%, and 0.34%, respectively [2]. Group 2: Revenue Growth - Seven banks achieved year-on-year revenue growth, with only CITIC Bank experiencing a slight decline of 0.55% [2]. - Ningbo Bank's revenue grew by 8.01% to 71.968 billion yuan, driven by a significant 30.72% increase in net income from fees and commissions, highlighting the growth of intermediary business [2]. - Pudong Development Bank's revenue reached 173.964 billion yuan, marking a 1.88% increase, while Industrial Bank and China Merchants Bank reported revenues of 212.741 billion yuan and 337.532 billion yuan, respectively [2]. Group 3: Asset Expansion - The total assets of several banks have expanded significantly, with China Merchants Bank surpassing 13 trillion yuan and Industrial Bank reaching 11 trillion yuan [3]. - Smaller banks showed even faster growth, with Nanjing Bank, Ningbo Bank, and Hangzhou Bank's total assets increasing by 16.63%, 16.11%, and 11.96%, respectively, focusing on technology finance, green finance, and inclusive finance [3]. Group 4: Asset Quality - The core indicators of asset quality remain stable, with a decrease in the non-performing loan (NPL) ratio for four of the eight banks, while three banks maintained their ratios [4]. - Pudong Development Bank saw a significant reduction in its NPL ratio, decreasing by 10 basis points to 1.26%, while CITIC Bank and China Merchants Bank also reported slight declines [4]. - City commercial banks demonstrated particularly strong asset quality, with several banks maintaining NPL ratios below 1% [4]. Group 5: 2026 Strategic Focus - Many banks have outlined their strategic priorities for 2026, focusing on optimizing business structures, expanding intermediary income sources, and strengthening risk management [6]. - Bank of Communications emphasized increasing financial support for key sectors and enhancing services for small and micro enterprises [6]. - Beijing Bank has deployed ten key initiatives for 2026, aiming for qualitative and quantitative improvements in performance [7].

Core Viewpoint - The first batch of eight listed banks in China has reported their 2025 performance, showing overall positive growth in net profit and revenue, with a focus on optimizing business structures and enhancing risk management for 2026 [1][2]. Group 1: Financial Performance - All eight listed banks reported a year-on-year increase in net profit, with seven achieving both revenue and net profit growth [2] - Hangzhou Bank led with a 12.05% increase in net profit, while Ningbo Bank and Nanjing Bank reported growths of 8.13% and 8.08% respectively [2] - Among joint-stock banks, Pudong Development Bank saw a notable 10.52% increase in net profit, while CITIC Bank, China Merchants Bank, and Industrial Bank reported growths of 2.98%, 1.21%, and 0.34% respectively [2] - Seven banks achieved revenue growth, with only CITIC Bank experiencing a slight decline of 0.55% [2] - Ningbo Bank's revenue grew by 8.01% to 71.968 billion yuan, driven by a 30.72% increase in net income from fees and commissions [2] Group 2: Asset Expansion - Total assets of several banks have expanded significantly, with China Merchants Bank surpassing 13 trillion yuan and Industrial Bank reaching 11 trillion yuan [3] - Smaller banks like Nanjing Bank, Ningbo Bank, and Hangzhou Bank saw asset growth rates of 16.63%, 16.11%, and 11.96% respectively, focusing on technology finance, green finance, and inclusive finance [3] Group 3: Asset Quality - The asset quality indicators remain stable, with a decrease in non-performing loan (NPL) ratios for four banks and three remaining stable [4] - Pudong Development Bank reported a significant decrease in NPL ratio by 10 basis points to 1.26%, while CITIC Bank and China Merchants Bank saw declines of 1 basis point to 1.15% and 0.94% respectively [4] - The overall provision coverage ratio has slightly decreased but remains at a high level, with several banks maintaining coverage ratios above 300% [4] Group 4: Future Strategies - Many banks have outlined their 2026 operational focuses, emphasizing business structure optimization, expanding fee income sources, and strengthening risk management [5][6] - Bank of Beijing has set ten key initiatives for 2026, aiming for qualitative and quantitative growth through deepening specific banking services and ensuring compliance [6]

Investment Rating - The report maintains a positive outlook on the banking sector, particularly highlighting the potential of specific banks such as China Merchants Bank [1][5]. Core Insights - The banking sector is experiencing a significant expansion in wealth management, with the total scale reaching 33.3 trillion yuan by the end of 2025, reflecting a growth of 3.34 trillion yuan and an annual growth rate of 11.2% [3][12]. - The report indicates a strategic shift towards increasing allocations in deposits and public funds while slightly reducing allocations in certificates of deposit and equity assets [4][5]. - The average yield of wealth management products is reported at 1.98%, with a total of 730.3 billion yuan generated for investors in 2025 [4]. Summary by Sections Market Dynamics - The A-share market saw an increase of 1.81% this week, while the banking sector declined by 2.70% [15]. - The People's Bank of China maintained the loan market quotation rate (LPR) at 3.0% for one year and 3.5% for five years and above [1][12]. Wealth Management Trends - By the end of 2025, the wealth management scale is projected to reach 33.3 trillion yuan, with various product categories showing different growth patterns [3][4]. - Cash management products have seen a decline, with a total decrease of 0.26 trillion yuan in 2025, although there was a recovery in the second half of the year [3]. Asset Allocation - As of the end of 2025, the investment assets of wealth management products totaled 35.66 trillion yuan, with bonds, deposits, and public funds making up the majority of the allocations [4]. - The report notes a significant increase in allocations to deposits (2.38 trillion yuan) and public funds (0.89 trillion yuan) [4]. Future Outlook - The report anticipates that the wealth management scale will continue to grow rapidly in 2026, with a neutral expectation of an increase of approximately 3 trillion yuan [5].

Investment Rating - The report assigns an "Overweight" rating to the banking sector [4]. Core Insights - As of January 23, 2026, eight banks have reported stable growth in performance and maintained asset quality. The outlook for 2026 suggests continued improvement in listed banks' performance, supported by narrowing interest margin declines and decreasing credit costs [2][4]. Summary by Sections Performance Indicators - Eight banks reported their performance for 2025, showing stable growth and asset quality. The revenue growth rates for major banks were as follows: - Shanghai Pudong Development Bank: +1.9% - Industrial Bank: +0.2% - China Merchants Bank: +0.01% - CITIC Bank: -0.6% - Regional banks like Nanjing Bank and Ningbo Bank showed stronger growth at +10.5% and +8.0% respectively [4][6]. - Profit growth was stable across listed banks, with notable increases in Hangzhou and Shanghai Pudong Development Bank exceeding 10% [4][6]. Scale and Growth - Quality regional banks continued to experience strong credit growth, with year-end asset growth rates for Nanjing, Ningbo, and Hangzhou at 16.6%, 16.1%, and 12.0% respectively. Loan growth rates were 13.4%, 17.4%, and 14.3% respectively [4][6]. - Overall deposit growth remained stable, with city commercial banks maintaining over 10% growth and joint-stock banks at 7%-8% [4][6]. Asset Quality - Non-performing loan ratios showed a stable or declining trend among the eight banks, with Shanghai Pudong, Suzhou Rural, and CITIC banks reporting decreases to 1.26%, 0.88%, and 1.15% respectively [4][6]. - The provision coverage ratio remained robust, with Hangzhou and China Merchants Bank showing declines of over 10 percentage points but still at high absolute levels [4][6]. Outlook for 2026 - The report anticipates continued improvement in bank performance in 2026, driven by narrowing interest margin declines and decreasing credit costs. Key factors include: - Net interest income growth expected to improve due to the expiration of high-cost long-term deposits and stable LPR [4][6]. - Fee income growth driven by insurance and wealth management channels [4][6]. - Asset quality improvements as risks in key corporate sectors are resolved [4][6]. Investment Recommendations - The report suggests focusing on three main investment lines for 2026: 1. Identifying banks with potential for performance growth, recommending Ningbo Bank, China Merchants Bank, and Nanjing Bank. 2. Considering banks with convertible bond expectations, recommending Chongqing Bank and Changshu Bank. 3. Continuing dividend strategies, recommending Bank of Communications, Jiangsu Bank, and Chongqing Rural Commercial Bank [4][6].

Investment Rating - The report maintains a positive long-term outlook for the insurance sector, indicating a strong continuity in market performance despite recent fluctuations [2][12][16]. Core Insights - The financial sector experienced a mixed performance this week, with the non-bank financial index down by 1.45%, underperforming the CSI 300 index by 0.83 percentage points. The insurance sector saw a decline of 4.02%, while the brokerage sector decreased by 0.61% [1][10]. - The insurance sector's performance is driven by two main factors: policy support leading to economic recovery and liquidity easing combined with a strong stock market. The report suggests a shift from liquidity-driven growth to a focus on macro policy support and economic recovery expectations [2][13][16]. - The brokerage sector is expected to benefit from new regulations that enhance investment management quality, with a recommendation to focus on larger, undervalued firms and those involved in mergers and acquisitions [3][18]. - The banking sector is facing a slight decline, but there are signs of recovery in profitability for leading banks, with recommendations to focus on banks with high dividend yields and those expected to benefit from market conditions [19][21]. Summary by Sections Insurance Sector - The insurance sector's recent decline is attributed to short-term market sentiment and liquidity changes, but the long-term outlook remains positive due to strong support from both the liability and asset sides [2][12][16]. - Key recommendations include focusing on companies like China Pacific Insurance, China Ping An, China Life (H), and China Taiping, with a specific recommendation for New China Life [4][16]. Brokerage Sector - The brokerage sector's performance is slightly better than the overall market, with a focus on the new guidelines from the regulatory body that aim to improve fund management quality [3][17]. - Recommended firms include Guotai Junan, Huatai Securities, and others, particularly those with strong merger and acquisition prospects [4][18]. Banking Sector - The banking sector has shown a decline but is expected to stabilize, with recommendations to focus on banks with high earnings elasticity and strong dividend yields [19][21]. - Specific banks to watch include Hangzhou Bank, Ningbo Bank, and others, with a focus on those that have previously been undervalued [4][21].