Core Viewpoint - The report from CITIC Securities indicates that the banking sector is experiencing a narrowing decline in interest margins, stable asset quality, and improved performance growth in the second quarter, with expectations for a continued gradual improvement in subsequent quarters of the year [1] Group 1: Banking Sector Performance - The banking sector's interest margin decline has narrowed, indicating a potential stabilization in profitability [1] - Asset quality remains stable, suggesting that banks are managing their credit risks effectively [1] - Performance growth is improving, which may lead to a more favorable outlook for the sector in the near term [1] Group 2: Future Expectations - It is anticipated that the trends observed in the second quarter will continue to improve gradually throughout the year [1] - The banking sector is expected to experience a revaluation of net assets, indicating a potential for long-term growth [1] - Short-term fluctuations may occur due to the influence of market styles and the inflow of trading funds, highlighting the importance of sustained investment [1] Group 3: Valuation Insights - The report suggests that the banking sector's valuation may remain below one times net assets, indicating room for recovery [1] - Absolute returns are still expected, emphasizing the potential for investment opportunities despite market volatility [1]

Group 1 - The banking sector showed volatility on June 26, with the China Securities Banking Index rising by 0.27% at the time of reporting [1] - The Tianhong Bank ETF (515290) experienced a V-shaped rebound, increasing by 0.38%, potentially marking a five-day winning streak [1] - Notable performers among constituent stocks included Qingdao Bank and Suzhou Bank, both rising over 3%, while Ningbo Bank and Jiangsu Bank increased by over 2% [1] Group 2 - Minsheng Securities predicts that the banking sector's revenue growth is expected to stabilize by 2025, with potential for further valuation recovery [1] - In 2024, the banking sector will face performance pressures primarily due to insufficient effective credit demand, declining LPR, adjustments in existing mortgage loan rates, and reduced fees from wealth management fund sales [1] - Despite ongoing pressures in 2025, improvements in macroeconomic expectations, gradual resolution of real estate risks, and local government debt management are anticipated to alleviate concerns regarding significant fluctuations in bank asset quality, leading to further valuation recovery [1] Group 3 - Wanlian Securities highlights the attractiveness of the banking sector's dividend yield from the perspective of RMB asset allocation, alongside regulatory encouragement for insurance funds to increase market participation [2] - The introduction of the "Public Fund High-Quality Development Action Plan" is expected to guide continuous capital allocation towards the banking sector, reinforcing the valuation floor [2] - Future incremental capital is anticipated to support the sustained performance of the banking sector [2]

Core Viewpoint - The banking sector has shown strong performance in 2023, with a cumulative increase of 14.11% as of June 23, 2025, ranking first among 31 industries, driven by high dividend strategies and stable absolute returns amid global macro uncertainties [1] Group 1: Investment Trends - The banking sector features high dividend yields and low valuations, attracting long-term capital inflows [2] - Insurance capital continues to favor high-dividend equity assets, with bank valuations between 0.6-0.7 times, providing a cost-effective investment option [2] - Southbound funds have been actively buying Hong Kong and H-shares of banks, particularly state-owned banks, which have seen a significant increase in their market share [2] - Public funds are expected to increase their allocation to banks, with current allocation weights significantly lower than the sector's representation in the market [3] Group 2: Banking Fundamentals - The banking sector is expected to maintain a bottoming trend, with credit growth around 7%-8% and a gradual slowdown in the trend of deposit regularization [4] - The optimization of liability costs is expected to mitigate the impact of LPR cuts, leading to a narrowing of interest margin declines [4] - Non-interest income is showing marginal improvement, although other non-interest income sources are under pressure [4] - Asset quality remains stable, supported by ongoing government support for the real economy, although retail loan quality may face marginal deterioration [4] Group 3: Market Dynamics - The trading congestion indicators for banks have not reached previous highs, indicating room for further growth [5] - The trading volume and turnover rate of state-owned banks are significantly lower than previous market peaks, while city commercial banks are seeing increased activity [5] - Agricultural commercial banks have experienced a notable increase in trading activity, benefiting from recent market trends and index inclusions [5] Group 4: ETF Performance - The banking ETF (515020) has a dividend yield of 5.19%, a PE ratio of 7.21, and a PB ratio of 0.72 as of June 23, 2025 [6] - The Hong Kong Stock Connect Financial ETF (513190) has a dividend yield of 8.18%, a PE ratio of 6.48, and a PB ratio of 0.58 [6] - The Low Volatility Dividend ETF (159547) has a dividend yield of 5.29%, a PE ratio of 8.25, and a PB ratio of 0.84, with banks comprising 49.2% of the index [6]

Core Viewpoint - The banking sector is experiencing a resurgence, with significant stock price increases among major banks, indicating a positive market sentiment and expectations for valuation recovery [1][2]. Group 1: Market Performance - As of May 13, the China Securities Bank ETF (512730.SH) rose by 1.11%, and its associated index, the China Securities Bank Index (399986.SZ), increased by 1.12% [1]. - Major constituent stocks such as China Merchants Bank, Shanghai Pudong Development Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, and Jiangsu Bank saw price increases ranging from 1.12% to 2.56% [1]. - Notably, Shanghai Pudong Development Bank and Jiangsu Bank reached historical highs, while Chongqing Bank and Citic Bank achieved new highs for the year [1]. Group 2: Analyst Insights - According to a recent report by Open Source Securities, the reform of public funds highlights the investment value of the banking sector, maintaining a "positive" rating for the industry [1]. - The report suggests that the coordinated development of deposits and loans, along with a balance in "volume and price," will enhance the fundamentals of banks [1]. - Huaxi Securities noted that the current valuation of the banking sector is at a historical low, prompting some institutional investors to increase their allocation to high-dividend banking stocks [1].