Core Insights - The rapid growth of the first batch of 10 Sci-Tech Bond ETFs, which surpassed 100 billion in scale, is driven by several factors, including the alignment with national policies supporting technological innovation and the increasing demand for stable returns in a low-interest-rate environment [1][2] Group 1: Factors Driving Growth - Sci-Tech Bonds serve as a new financing tool that supports the development of technological innovation, aligning with the country's focus on enhancing productivity [1] - The Sci-Tech Bond ETF meets current investor needs by combining policy tool attributes with the theme of technological innovation, offering growth potential and policy benefits [1] - In a low-interest-rate market, investors are seeking stable returns, and Sci-Tech Bonds provide greater elasticity compared to ordinary corporate and industrial bonds, offering a yield advantage [1] Group 2: Market Capacity and Characteristics - The overall market capacity for Sci-Tech Bonds is significant, with the CSI AAA Sci-Tech Bond Index exceeding 1 trillion, indicating potential for further expansion [2] - Sci-Tech Bonds are classified as credit bonds, which carry credit risk, unlike government bonds that are free from default risk. This credit risk premium differentiates them from government bonds [3] - The duration characteristics of Sci-Tech Bonds are typically shorter, and they offer higher coupon yields, making them attractive for investors anticipating interest rate declines [3] Group 3: Unique Attributes of Underlying Assets - The underlying assets of Sci-Tech Bond ETFs focus on supporting high-quality development in the technology sector, with funds primarily directed towards technological innovation [4] - The issuance of Sci-Tech Bonds has seen rapid growth, with the primary market exceeding 2 trillion, reflecting a 40% increase since the beginning of the year [4] - Historical data indicates that while the duration of credit bond indices is longer, the Sci-Tech Bond index, focused on growth, exhibits greater elasticity, presenting a unique advantage [4] Group 4: Impact of Funding on Investment - Sci-Tech Bonds inherently support the development of cutting-edge fields such as semiconductors, artificial intelligence, and high-end manufacturing, which have long-term financing needs [5] - The expanding financing demand in these sectors supports the growth of the primary market for Sci-Tech Bonds, thereby increasing investor interest in the secondary market [5] - Sci-Tech Bonds can enhance the elasticity of investment portfolios, making them suitable for long-term allocation by investors with risk tolerance [5]

Investment Rating - The investment rating for Qingdao Bank is "Buy" with a target price of HK$4.15 per share, indicating a potential upside of 27% from the current price of HK$3.27 [4][11]. Core Views - Qingdao Bank is characterized as a growth-oriented city commercial bank deeply rooted in Shandong, with debt reduction efforts expected to improve risk assessments and support strong profit growth [1][10]. - The bank's asset quality is on an improving trend, with a non-performing loan (NPL) ratio of 1.17% as of Q3 2024, slightly above the industry average, but showing a significant decrease from previous years [3][9]. - The bank's return on equity (ROE) has been gradually improving, driven by an expansion in interest margins and operational cost reductions [2][33]. Company Profile - Qingdao Bank was established in 1996 through the merger of 21 urban credit cooperatives and has grown to a total asset size of approximately 669 billion yuan, positioning it at the median level among city commercial banks [19][22]. - The bank has a diversified ownership structure, with major shareholders including Haier Group and the Italian bank Intesa Sanpaolo, which enhances its governance and operational capabilities [28][29]. Financial Analysis - Since 2021, Qingdao Bank's net interest margin has improved, reaching 1.77% in H1 2024, which is 15 basis points higher than the average for city commercial banks [35][37]. - The bank's asset yield was 4.07% in H1 2024, outperforming the average by 4 basis points, while its cost of liabilities was 2.25%, 6 basis points higher than the average [35][37]. - The bank's NPL generation rate has decreased significantly, with a TTM NPL generation rate of 0.64% in H1 2024, down 172 basis points from 2019 [3][10]. Investment Logic - The debt reduction policy is expected to enhance regional risk assessments, with limited impact on credit growth and a favorable outlook for interest margins [10][11]. - The expansion of branch networks has been a key driver for sustained growth, with the number of branches increasing to 196 by H1 2024, providing significant room for loan growth [11][22]. Profit Forecast and Valuation - The projected growth rates for Qingdao Bank's net profit from 2024 to 2026 are 20.16%, 10.38%, and 11.36%, respectively, with corresponding book values per share of 6.45, 6.97, and 7.67 yuan [11][13].