Report Industry Investment Rating No relevant content provided. Core Viewpoints - In September 2025, financial data was neutral, continuing the trend of "weak credit and rising M1 year-on-year". Affected by the base effect, the year-on-year growth rate of social financing is expected to decline. The "deposit relocation" process needs further verification, and the bond market is expected to be mainly volatile [6][30]. Summary by Directory 1. Financial Data Review - **Social Financing**: In September 2025, the year-on-year growth rate of social financing declined slightly to 8.68%. The government bond's driving effect on social financing weakened due to the misaligned issuance rhythm and high base from the previous year. Excluding government bonds, the year-on-year growth rate of social financing was 5.94% [4][10]. - **Money Supply**: M1 continued its high - growth trend, with a year-on-year growth rate of 7.2% in September, up 1.2 percentage points from the previous month. The year-on-year gap between M1 and M2 widened to -1.2%. The growth was driven by a low base last year and increased fiscal spending [5][17]. - **Credit**: The total credit was slightly weak and structurally differentiated. In September, new RMB loans were 129 billion yuan, slightly lower than expected. Corporate short - term loans expanded, while resident credit was weak. Resident short - term loans increased less year - on - year, and the personal consumption loan discount policy's effect was not fully shown. Resident long - term loans increased year - on - year due to housing policy optimization and the sales season. Overall, the credit data showed that policy guidance was effective in some areas, but enterprise long - term investment willingness and resident consumption credit recovery were still constraints [20][21]. - **Deposit**: In September, RMB deposit data showed structural differentiation. Resident deposits increased significantly, while non - banking financial institution deposits decreased. This was affected by seasonal factors and the high base from the previous year, and the "deposit relocation" trend needs further verification [27]. 2. Financial Data and Bond Market Outlook - The financial data in September was neutral, and the bond market is expected to improve slightly in the fourth quarter but remain a weak asset, mainly volatile. Investors should focus on four short - term disturbance factors: tariff trends, fund sales fee rate adjustments, inflation trends, and equity market performance [30].

Group 1: Macro and Strategy - In September, China's new social financing reached 3.53 trillion yuan, exceeding expectations of 3.27 trillion yuan, while new RMB loans amounted to 1.29 trillion yuan, slightly below the expected 1.39 trillion yuan. M2 growth year-on-year was 8.4%, close to the expected 8.5% [7][8] - The financial data indicates a trend of "total pressure, structural optimization," with social financing growth slowing to 8.7%, reflecting weak overall financing demand. However, there are signs of improvement in corporate credit structure and a slight increase in household medium to long-term loans [7][8] - The increase in deposits in September was 2.21 trillion yuan, with M2 growth rate declining to 8.4%. The structure shows an increase in household and corporate deposits, while fiscal and non-bank deposits decreased significantly [9] Group 2: Industry and Company - The e-commerce industry is currently focusing on two main themes: reducing competition pressure and enhancing efficiency for small and medium-sized merchants. Platforms are adjusting their monetization strategies, with Pinduoduo showing the most significant decline in monetization rate [12][13] - The upcoming Double 11 shopping festival is expected to see a reduction in investment from platforms, leading to a divergence in GMV performance. Taobao's market share is projected to decline slightly, while JD, Pinduoduo, and Kuaishou are expected to gain [12][13] - The media sector showed a 4.96% increase in September, outperforming the CSI 300 index by 1.76 percentage points. Key stocks like Giant Network and Mango Super Media performed well, while others like Youzu Network saw declines [14][15] - The gaming market's revenue in August saw a slight month-on-month increase of 0.6%, with 145 domestic games and 11 imported games approved in September. The market is expected to benefit from new product cycles and AI applications [14][15] - The film and television sector experienced a decline in box office revenue during the National Day holiday, primarily due to a lack of compelling new releases. However, the overall ticket sales in September increased by 82.8% year-on-year [15][16] - Investment recommendations include focusing on companies with strong AI capabilities and those benefiting from new product cycles in the gaming sector, such as Kae Ying Network and 37 Interactive Entertainment [17]

Core Viewpoint - The slowdown in government bond issuance and the pace of RMB appreciation are the main reasons for the decline in M2 growth, while the marginal decrease in corporate foreign exchange settlement tendencies is also a contributing factor [1][2]. Group 1: Social Financing - In September 2025, the stock of social financing growth slightly decreased to 8.7% from the previous 8.8%, with new social financing amounting to 3.53 trillion yuan, a year-on-year decrease of 229.7 billion yuan [1]. - New government bonds issued amounted to 1.19 trillion yuan, a year-on-year decrease of 347.1 billion yuan, while loans (social financing caliber) added 1.61 trillion yuan, a year-on-year decrease of 366.2 billion yuan, with the loan balance dropping to 6.6% year-on-year [1]. - Corporate bond issuance increased by 10.5 billion yuan, a year-on-year increase of 203.1 billion yuan, with local government bonds net financing increasing by 120 billion yuan year-on-year [1]. Group 2: Credit - In September, new credit amounted to 1.29 trillion yuan, a year-on-year decrease of 300 billion yuan, with both corporate and household loans continuing to decline [2]. - The main support for credit stability comes from short-term loans to enterprises, which saw significant increases at the end of the quarter, reflecting local governments' efforts to resolve triangular debts and actual financing needs driven by production activities [1][2]. - The PMI production index showed a notable increase in September, indicating a recovery in the traditional economy under the initial effects of the "anti-involution" policy [1]. Group 3: Monetary Policy - The M2 growth rate in September was 8.4%, down from 8.8%, while M1 growth rebounded to 7.2% from 6.0% [2]. - The decline in M2 growth is attributed to the slowdown in government bond issuance and a decrease in corporate foreign exchange settlements, influenced by the RMB's rapid appreciation and subsequent fluctuations in the US dollar index [2]. - Looking ahead, the upcoming "14th Five-Year Plan" is expected to introduce a series of incremental policies, with room for total policy adjustments, while the RMB still holds potential for appreciation under a supportive liquidity environment [2].

Core Insights - The significant decrease in non-bank deposits in September is attributed to a high base from the previous year and a weak stock market performance in 2025, which contrasts with the strong equity market in 2024 [2][4] Financial Data Summary - Non-bank deposits saw a substantial decline, with a year-on-year decrease of 19,700 million yuan, while resident deposits increased by 7,600 million yuan [4] - The total social financing (社融) in September was 35,338 million yuan, a year-on-year decrease of 2,297 million yuan, primarily due to a high base from government financing [3] - New RMB loans in September amounted to 12,900 million yuan, reflecting a year-on-year decrease of 3,000 million yuan, with short-term loans for residents decreasing by 1,279 million yuan [3] - M1 growth rate increased to 7.2%, while M2 growth rate remained stable at 8.4%, indicating a trend towards more liquid deposits among residents [3]

Group 1 - The article emphasizes the importance of tracking three financial indicators: M1 year-on-year growth, non-bank deposits, and corporate medium to long-term loans, as they reflect industrial inventory and PPI improvements, market activity, and production investment trends respectively [4][5][6] - In September, M1 year-on-year growth increased by 1.2%, while non-bank deposits decreased by 1.97 trillion, and corporate medium to long-term loans saw a slight decrease of 500 million [4][5] - The decline in non-bank deposits in September is attributed to seasonal factors, particularly the pressure on banks to meet deposit assessments at the end of the quarter, leading to a typical seasonal drop in non-bank deposits [4][5][9] Group 2 - The article discusses the implications of the significant drop in non-bank deposits in September, suggesting it does not necessarily indicate a weakening of the equity market's activity, and further observation of October's data is required [8][9] - The increase in M1 year-on-year is likely driven by a rise in household demand rather than improvements in corporate cash flow, as evidenced by the relatively modest increase in corporate deposits [10][23] - The article highlights that while the new M1 metric is statistically more accurate, historical discrepancies suggest that it may not directly correlate with corporate expectations, necessitating further analysis of traditional M1 metrics [10][24] Group 3 - In September, the total social financing increased by 3.53 trillion, a decrease of 2.3 trillion year-on-year, with a stock growth rate of 8.7% [31][32] - The article notes that corporate medium to long-term loans continued to show a decrease, with a total loan increase of 1.29 trillion, which is 300 billion less than the previous year [27][31] - M2 growth rate fell to 8.4% in September, down 0.4% from the previous month, while new M1 grew by 7.2%, reflecting a mixed trend in liquidity [32][33]

Group 1: Financial Data Overview - In September, new social financing (社融) amounted to 3.53 trillion yuan, a decrease of 229.7 billion yuan compared to the same month last year, but an increase of 967 billion yuan from August, exceeding the consensus expectation of 3.27 trillion yuan[2] - The year-on-year growth rate of social financing stock was 8.7%, slightly down by 0.13 percentage points from August, and above the expected 8.63%[2] - New RMB loans in September were 1.61 trillion yuan, down by 366.2 billion yuan year-on-year, but up by 982.7 billion yuan from August[2] Group 2: Financing Structure and Trends - Government bond financing in September was 1.19 trillion yuan, down by 347.1 billion yuan year-on-year, while direct financing increased, with corporate bond and stock financing up by 203.1 billion yuan and 37.2 billion yuan respectively[2] - The proportion of government bonds in the financing structure increased by 0.11 percentage points from August, while RMB loans decreased by 0.11 percentage points[2] - M2 growth was 8.4% year-on-year, down by 0.4 percentage points from August, while M1 grew by 7.2%, up by 1.2 percentage points[2] Group 3: Deposit and Loan Trends - New deposits in September totaled 2.21 trillion yuan, with new household deposits at 2.96 trillion yuan and new corporate deposits at 919.4 billion yuan, but fiscal and non-bank deposits saw significant declines[2] - The trend of "deposit migration" appears to be slowing, as household deposits increased year-on-year while non-bank deposits decreased[2] - New loans from financial institutions were 1.29 trillion yuan, down by 300 billion yuan year-on-year, with corporate loans at 1.22 trillion yuan, also down by 270 billion yuan[2]

Credit and Financing Analysis - In September, the growth rate of RMB loans decreased from 6.8% to 6.6%, with new loans totaling 1.6 trillion yuan, a year-on-year decrease of 3.66 billion yuan[7] - Short-term loans increased by 122.1 billion yuan year-on-year, while medium and long-term loans decreased by 30 billion yuan[10] - Corporate bill financing saw a net repayment of 402.6 billion yuan, a year-on-year decrease of 471.2 billion yuan[10] - The total social financing (社融) in September was 3.53 trillion yuan, a year-on-year decrease of 229.7 billion yuan, with a stock growth rate of 8.7%[6] Monetary Supply Insights - M1 growth in September was 7.2%, an increase of 1.2 percentage points, but showed a significant decline from 2.3% in March to -3.3% in September due to manual interest compensation[27] - M2 growth was 8.4%, a decrease of 0.4 percentage points from the previous value[6] - The decline in non-bank deposits was 1.06 trillion yuan in September, a year-on-year decrease of 1.97 trillion yuan, indicating significant volatility[23] Policy and Economic Implications - Policy financial tools began to be deployed at the end of September, which may support social financing in the fourth quarter[18] - Fiscal deposits decreased by 840 billion yuan in September, a year-on-year reduction of 604.2 billion yuan, suggesting accelerated fiscal spending to stabilize economic growth[26] - Risks include potential underperformance of domestic policy measures, uncertainties in investment behavior, and unexpected changes in overseas policies and geopolitical situations[31]

Investment Rating - The report maintains a "Recommended" rating for the banking industry [1]. Core Insights - The demand for financing remains to be improved, with a continuation of fund activation [3]. - Social financing (社融) has shown a year-on-year decrease, with September's new social financing at 3.53 trillion yuan, a decrease of 229.8 billion yuan compared to the previous year [3]. - The growth rate of social financing stock is at +8.68% year-on-year, with a slight decline of 0.13 percentage points month-on-month [3]. - The issuance of government bonds continues to weaken its support for social financing growth, with new government bonds in September amounting to 1.19 trillion yuan, a decrease of 347.1 billion yuan year-on-year [3]. - The report highlights a marginal improvement in residents' medium and long-term loans, while corporate financing demand remains weak [3]. - The report suggests that the activation of funds is increasing, with M1 and M2 growth rates at +7.2% and +8.4% year-on-year, respectively [3]. - The report emphasizes the need for recovery in credit demand and suggests monitoring the effectiveness of new policy financial tools [3]. Summary by Sections Banking Industry - The banking sector's fundamentals are accumulating positive factors, with a marginal improvement in mid-term performance expected [3]. - The report recommends specific banks, including Industrial and Commercial Bank of China (601398), Agricultural Bank of China (601288), and others, indicating their potential for value [3].

Group 1: M2 Growth and Monetary Policy - M2 growth rate decreased to 8.4% in September from 8.8% in the previous month[16] - M1 growth rate rebounded to 7.2% from 6.0%[16] - The decline in M2 growth is attributed to a slowdown in government bond issuance and a decrease in corporate foreign exchange settlement tendencies[1] Group 2: Social Financing and Credit - Social financing stock growth slightly decreased to 8.7% in September, down from 8.8%[7] - New social financing amounted to 3.53 trillion yuan, a year-on-year decrease of 229.7 billion yuan[9] - New loans (social financing perspective) totaled 1.61 trillion yuan, a year-on-year decrease of 366.2 billion yuan, with the loan balance dropping to 6.6%[7] Group 3: Credit Structure and Trends - New credit in September was 1.29 trillion yuan, down 300 billion yuan year-on-year[11] - Corporate short-term loans were the main support, with 710 billion yuan added, a year-on-year increase of 250 billion yuan[11] - The increase in corporate short-term loans is linked to local governments resolving triangular debts and actual financing needs driven by production activities[11] Group 4: Future Outlook and Risks - Incremental policies are on the way, with the "14th Five-Year Plan" expected to be released soon, indicating potential for total policy support[23] - The overall weak trend of the US dollar suggests continued potential for RMB appreciation, with the central bank adjusting the exchange rate midpoint to below 7.1[23] - Risks include the possibility that the recovery of the private sector's balance sheets may not meet expectations[26]

Financial Data Overview - In September, China's new social financing (社融) reached CNY 3.53 trillion, exceeding the expected CNY 3.27 trillion[2] - New RMB loans amounted to CNY 1.29 trillion, slightly below the expected CNY 1.39 trillion[2] - M2 growth year-on-year was 8.4%, slightly below the expected 8.5%[2] Economic Trends - Social financing growth rate fell to 8.7%, with a year-on-year decrease of CNY 229.7 billion, indicating weak overall financing demand[5] - Corporate credit structure improved, with short-term loans increasing by CNY 250 billion year-on-year, while medium to long-term loans for residents increased by CNY 20 billion, reflecting positive effects from recent real estate policy adjustments[5][15] - M1 growth rate rose by 1.2 percentage points to 7.2%, indicating enhanced liquidity in the economy[5][25] Government and Fiscal Policy - Government financing through bonds contributed significantly to social financing, with CNY 1.19 trillion in new government bond financing, although this was CNY 347.1 billion less than the previous year[19] - Fiscal deposits decreased by CNY 604.2 billion, suggesting an acceleration in government spending[6][25] Future Outlook - Continued focus on fiscal policy strength and the impact of new policy financial instruments is necessary[6] - The real estate market's performance in the "golden September and silver October" period will be crucial for sustaining credit recovery[6]