Core Viewpoint - The recent strong performance of the stock market has significantly impacted the bank wealth management market, leading to the early termination of several wealth management products linked to the "CSI 1000 Index" due to reaching performance targets [1][2]. Group 1: Early Termination of Wealth Management Products - Several wealth management companies, including Xingyin Wealth Management and ICBC Wealth Management, announced the early termination of products linked to the CSI 1000 Index after they reached the performance benchmarks [2][3]. - The CSI 1000 Index saw a 4.7% increase in July, contributing to a year-to-date rise of 6%, which triggered the early termination of these products [2]. - The early termination mechanism is designed to secure profits when the linked asset performs better than expected, thus avoiding potential market volatility risks [3]. Group 2: New Product Issuance - Following the early terminations, wealth management institutions are actively launching new products linked to the CSI 1000 Index to fill the gap [4]. - For instance, Zhaoyin Wealth Management launched a new product with a fundraising scale exceeding 71.67 million yuan, continuing the trend of products linked to the CSI 1000 Index [4]. - A total of 53 wealth management products linked to various indices are currently in the fundraising or ongoing phases, with over 40% of them still open for subscription [5]. Group 3: Market Trends and Product Structure - As of June 2025, the total scale of bank wealth management products reached 30.97 trillion yuan, reflecting a 3.4% increase from the previous year, although the product structure shows increasing imbalance [6]. - Cash management products have decreased to 22.12% of the total, while fixed-income products dominate at 75.57%, with mixed and equity products accounting for less than 2.2% [6]. - The average yield across the market has declined to 2.4%, with a notable drop of 22 basis points, while mixed products saw a slight increase in yield [6].

Core Viewpoint - The banking wealth management industry is undergoing a valuation rectification process, which aims to eliminate irregular valuation methods and enhance market transparency [1][4][5]. Group 1: Valuation Rectification Progress - Financial regulatory authorities have set a deadline for wealth management companies to complete rectification by the end of this year, with many companies reporting that they have completed over half of their tasks [2][3]. - Some companies, particularly in southern China, have already completed their rectification efforts as early as last year [2]. - The focus of the rectification is primarily on the closing price valuation method, which is used for trading bonds on exchanges [2][3]. Group 2: Impact on Market Dynamics - The rectification process is expected to increase the volatility of wealth management product net values, as companies will no longer use smoothing methods to adjust net value fluctuations [1][6]. - The average annualized yield of open-ended fixed-income wealth management products has decreased to 2.84% as of the end of May, reflecting the impact of the rectification [6]. - The number of low-volatility, stable wealth management products is likely to decrease, while the proportion of mixed wealth management products may rise [6]. Group 3: Future Focus and Strategy - Post-rectification, wealth management companies will need to enhance their research and asset allocation capabilities to better manage net value fluctuations [7]. - Companies are advised to optimize their underlying asset allocation structure and improve their research capabilities in equity assets to balance market opportunities and volatility control [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The period from 2022 - 2024 was a significant turning point for the wealth management industry, with notable changes in the asset - liability structure, risk, and return of wealth management products. In 2025, the industry is entering a new stage of net - value transformation. Short - term low - volatility remains the core goal of bank wealth management, and in the long run, there are two potential breakthroughs: continuing to create deposit - alternative products and adopting the "fixed income + multi - asset" strategy [13][70]. 3. Summary Based on Relevant Catalogs 3.1 2022 - 2025, Changes in the Yield and Drawdown of Wealth Management Products - **2022: Representative shock after the full net - value transformation of the wealth management market** - In Q4 2022, after the extreme compression of credit spreads, the bond market reversed, leading to a redemption negative feedback shock in the wealth management market. The industry scale dropped from 31.4 trillion yuan in Oct 2022 to 25.0 trillion yuan in Mar 2023. About 76% of products had a maximum drawdown exceeding 50bp, and nearly half of the products had an annualized yield falling below 2% [2][12][14]. - **2023: The "repair year" after negative feedback** - The wealth management industry shifted its focus to stabilizing yields, introduced net - value smoothing operations, and reshaped the product layout and asset allocation. The weighted annualized return rose to 3.30% from 1.47% in 2022. Over 70% of products had an annual maximum drawdown below 20bp [20][21][24]. - **2024: The "final year" of the low - volatility era of wealth management** - Regulatory tightening ended the low - volatility era. The product structure concentrated more on short - duration products. The proportion of products with an annualized yield between 2.5% and 3.5% increased to 49%, and about 60% of products had a drawdown within 10bp [28][30]. - **2025: Valuation rectification may be carried out in an orderly manner** - Regulatory focus is on the "closing price valuation". As of May 31, 2025, the scale of Shanghai Stock Exchange private bonds held through trust was still 2.49 trillion yuan. As of May 31, 19% of products had a drawdown exceeding 20bp, and 6% had a drawdown over 50bp, but 73% of products had a drawdown within 10bp [35][40]. 3.2 Returning to "Net - value", What Changes Have Occurred in Wealth Management? - **Liability side: Expand scale and reduce costs** - In 2025, wealth management institutions aimed to expand scale. By May 31, wealth management had increased by 1.58 trillion yuan compared to the beginning of the year. The liability side shifted from absolute drawdown sensitivity to partial yield sensitivity, and the weighted duration of products started to rise. Wealth management also actively lowered the lower limit of the performance benchmark [44][45][50]. - **Asset allocation: Emphasize liquidity and gradually enter the new stage of "certificates of deposit + short - term bonds"** - In 2025, there were three transformation signals in asset allocation: continued reduction of the deposit position, increased allocation of certificates of deposit, and increased allocation of bond - related assets, especially interest - rate bonds. The proportion of public funds in the first - quarter allocation also increased by 0.1 pct to 3.0% [55][56][63]. 3.3 Looking Ahead, Seeking Opportunities in Changes - In the short term, low - volatility remains the core goal of bank wealth management. In the long run, there are two potential breakthroughs: continuing to create deposit - alternative products and adopting the "fixed income + multi - asset" strategy [70].

Core Insights - The low interest rate environment is significantly impacting household asset allocation and pushing the financial industry towards transformation [2][5] - Financial companies are adapting to the pressure on yields by focusing on "fixed income plus" products and diversifying their investment strategies [3][6] Group 1: Market Trends - As of the end of 2024, 95.69% of the existing wealth management products have a risk level of R2 (medium-low) or below, with fixed income products dominating at 73% of the total scale [3] - The annualized yield for fixed income wealth management products has dropped to the "2" range, while cash management products have fallen to the "1" range [3] Group 2: Product Strategy - Financial companies are increasingly optimizing their fixed income product asset allocation and trading capabilities to stabilize investor experience [3][6] - The introduction of "fixed income plus" products aims to enhance yields by incorporating convertible bonds, public REITs, and equity assets [3][4] Group 3: Investor Guidance - Investors are advised to manage their yield expectations as financial companies are lowering performance benchmarks for new products, with a 15 basis point reduction for semi-annual fixed income products and 20 basis points for one-year products [5] - When purchasing equity-linked products, investors should assess their risk tolerance, review product details, and consider the product's duration and liquidity [7]

Group 1: Company Strategy and Financial Management - The company aims to build a modern financial system centered around trust, integrating various financial licenses including banking, insurance, and securities, to create a comprehensive financial service platform [1] - The net capital/net asset ratio for 2024 is projected to decline to 85%, nearing regulatory limits, but remains compliant with the 40% requirement [2] - The company plans to maintain a stable dividend policy, ensuring predictable returns for shareholders, with a cumulative dividend payout ratio of 33.82% for 2024 [7] Group 2: Business Performance and Growth - The scale of standard trust business is expected to grow by 28% in 2024, with revenue growth at 12%, indicating potential downward pressure on product fees [2] - The total trust asset scale is projected to increase by 10% in 2024, with actively managed trust assets accounting for approximately 73.4% of total trust assets [3] - The company aims to enhance its asset management capabilities and diversify its product offerings, targeting a product scale of 2.7 trillion yuan by 2025 [4] Group 3: Market Communication and Investor Relations - The company emphasizes the importance of market communication, planning regular announcements, performance briefings, and roadshows to keep investors informed [5] - As of May 9, 2025, the total number of shareholders is reported to be 110,804 [6] - The company is committed to protecting the interests of all shareholders, particularly minority shareholders, by optimizing resource allocation and enhancing long-term value [7] Group 4: Risk Management and Compliance - The company is focused on strengthening its risk management framework to address various risks, including credit, market, operational, and liquidity risks [7] - The company is in the process of completing necessary approvals for a targeted stock issuance, which includes obtaining approvals from the provincial finance department and the national financial supervision authority [8]