Core Viewpoint - Agricultural Bank of China has surpassed Industrial and Commercial Bank of China to become the market capitalization champion in A-shares, reflecting a phase of valuation recovery and capital allocation logic in the banking sector [2][3]. Group 1: Company Performance - As of August 6, Agricultural Bank's stock closed at 6.62 CNY per share, up 1.22%, reaching a historical high with a market capitalization of 2.11 trillion CNY [2]. - In Q1 2025, Agricultural Bank reported a net profit growth of 2.2% year-on-year and 6.23% quarter-on-quarter, while Industrial and Commercial Bank experienced a net profit decline of 3.99% year-on-year and 13.1% quarter-on-quarter [2]. Group 2: Market Dynamics - The rise of Agricultural Bank's market value is attributed to its stable earnings, high dividend yield, and deep engagement in county-level economies, making it a "ballast" for stable funds like insurance and pension funds [3]. - Nearly 50% of bank stocks have reached historical highs this year, indicating a broader trend in the banking sector [4]. Group 3: Historical Context - Historically, A-share market capitalization champions have shifted from local companies in the 1990s to major state-owned banks and consumer brands in the 21st century, with Agricultural Bank's recent rise marking a significant shift [4][5]. - The transition of market leaders reflects changes in economic structure and capital preferences, with a current focus on certainty in returns amid declining interest rates [5]. Group 4: Future Outlook - Short-term trends suggest that the valuation recovery of bank stocks may continue, especially with supportive fiscal and monetary policies benefiting major banks like Agricultural Bank [5]. - Long-term prospects indicate that if economic recovery exceeds expectations or interest rates rise, technology or consumer sectors may reclaim the top position, but the "certainty of returns" from bank stocks will remain attractive in volatile markets [5].