Core Viewpoint - The Agricultural Bank of China (ABC) is expected to be a leader in stabilizing above 1x PB, driven by strong support from the central government and a reshaping competitive landscape in the banking sector [1][5][24] Summary by Sections Recent Performance - ABC's stock price surged by 21.3% in October, marking the highest monthly increase since 2015, and it has recently surpassed the 1x PB threshold for the first time in seven and a half years [2][3][10] - Following this surge, ABC's stock experienced a significant drop after reaching a new high on October 23, indicating potential short-term volatility [2][7] Valuation and Market Dynamics - As of October 22, ABC's PB ratio reached 1.06, while other major state-owned banks had lower PB ratios, indicating a diminishing valuation advantage for ABC [3][10] - The competitive landscape is shifting, with state-owned banks gaining market share, increasing from 44.1% at the end of 2020 to 46.8% by mid-2025, highlighting the "Matthew Effect" where stronger banks become even stronger [19][20] Future Outlook - The central government has emphasized the importance of state-owned banks, planning to increase their core tier one capital, which will further solidify their market position [17][18] - ABC's strong fundamentals, including a stable ROE supported by fiscal injections and a focus on county-level financial services, position it well for future growth [21][22][23] - The bank's recent achievements in the capital market and its strategic focus on county-level expansion are expected to drive performance and market confidence [24] Investment Recommendations - The banking sector is anticipated to perform well in the fourth quarter and the first quarter, with ABC likely benefiting from this trend [6][24] - The long-term outlook remains positive for ABC to maintain a PB above 1x, supported by its competitive advantages and favorable market conditions [5][24]