Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Financials - **Date**: October 15, 2025 - **Analyst**: Richard Xu, CFA; Chiyao Huang; Chenqian Liu Core Insights 1. **M1 Growth**: There was a further pickup in M1 growth in September, reaching 7.2% year-over-year (YoY), compared to 6% in August, indicating improved liquidity and corporate sentiment despite moderating Total Social Financing (TSF) [3][8][10] 2. **Loan Growth Trends**: RMB loan growth moderated to 6.4% YoY from 6.6% the previous month, influenced by reduced window guidance and ongoing local government financing vehicle (LGFV) debt swaps [2][8] 3. **Corporate Loans**: Corporate loans remained the primary driver of loan growth, although there is a rationalization in industrial capital expenditure (capex) growth, leading to further moderation in medium- and long-term corporate loan growth [2][8] 4. **Government Bonds**: Government bonds added RMB 1.19 trillion in September, which is RMB 346 billion lower YoY, with a year-to-date (YTD) total of RMB 11.46 trillion [8][10] 5. **Corporate Deposits**: Corporate deposits grew by 4.2% YoY, with demand deposits rebounding to 6.7% YoY from 5.2% the previous month, indicating a recovery in corporate demand [3][8] Additional Important Points 1. **TSF Growth**: Headline TSF growth slowed to 8.7% YoY in September from 8.8% in August, reflecting a continued slowdown in loan growth and less support from government bonds [8][9] 2. **Household Loan Demand**: There was a modest pickup in long-term household loan growth, suggesting some recovery in mortgage loan demand, although overall household loan growth remains weak [2][8] 3. **Investment Sentiment**: The notably higher M1 growth is viewed as a positive sign indicating improved liquidity and corporate sentiment, which may help in moderating financial risks [3][8] 4. **Market Outlook**: The overall view of the China financials industry remains attractive, with expectations of continued recovery in financial metrics [5] Conclusion The conference call highlighted a mixed but cautiously optimistic outlook for the China financials sector, with signs of recovery in M1 growth and corporate deposits, while loan growth remains moderated due to tighter risk standards and reduced policy support. The industry is viewed as attractive, suggesting potential investment opportunities amidst the current economic landscape.