2025 Annual Results March 30, 2026 Disclaimer This presentation and subsequent discussions may contain forward-looking statements that involve risks and uncertainties. These statements are generally indicated by the use of forward-looking terminology such as believe, expect, anticipate, estimate, plan, project, target, may or will, or may be expressed as being the results of actions that may or are expected to occur in the future. You should not place undue reliance on these forward-looking statements, whic ...

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The report indicates that domestic financial aggregates are growing rapidly, while US inflation remains flat without reflecting the impact of oil price shocks. China's economic policies are more proactive, supporting the rapid growth of financial aggregates. The US inflation and employment data show certain trends, and the Fed's monetary policy decisions also have an impact on the market. Geopolitical conflicts, such as the situation between Israel and Iran, may affect the global oil market and inflation [3][4][5]. 3. Summary by Directory Economic Situation - **2025 GDP**: The GDP in 2025 was 1,401,879 billion yuan, a 5.0% increase from the previous year. The primary industry added value was 934.7 billion yuan, up 3.9%; the secondary industry was 4,996.53 billion yuan, up 4.5%; the tertiary industry was 8,088.79 billion yuan, up 5.4% [24]. - **Industrial Added Value**: In 2025, the industrial added value of large - scale industries increased by 5.9% year - on - year. Mining increased by 5.6%, manufacturing by 6.4%, and the production and supply of electricity, heat, gas, and water by 2.3%. Equipment manufacturing and high - tech manufacturing increased by 9.2% and 9.4% respectively [25]. - **Consumption**: The total retail sales of consumer goods in 2025 was 5,012.02 billion yuan, a 3.7% increase. Urban consumption was 4,329.72 billion yuan, up 3.6%; rural consumption was 682.3 billion yuan, up 3.1%. Commodity retail sales were 4,432.2 billion yuan, up 3.8%; catering revenue was 579.82 billion yuan, up 3.2% [25]. - **Investment**: In 2025, fixed - asset investment (excluding rural households) was 4,851.86 billion yuan, a 3.8% decrease. Infrastructure investment decreased by 2.2%, manufacturing investment increased by 0.6%, and real estate development investment decreased by 17.2%. Newly built commercial housing sales area decreased by 8.7%, and sales volume was 8,020.2 billion yuan [25]. - **Exports and Imports**: In 2026, the export amount and import amount had certain fluctuations. The specific data can be found in the detailed table [16]. - **Unemployment Rate**: In 2026, the urban surveyed unemployment rate and other unemployment - related data showed certain trends [16]. - **PMI**: In February 2026, the manufacturing PMI was 49.0%, a 0.3 - percentage - point decrease from the previous month. High - tech manufacturing PMI was 51.5%, remaining in the expansion range [8]. Financial Situation - **Social Financing Scale**: At the end of February 2026, the stock of social financing scale was 451.4 trillion yuan, a year - on - year increase of 8.2%. The balance of RMB loans issued to the real economy was 274.15 trillion yuan, a year - on - year increase of 6.1%. The incremental social financing scale in the first two months was 9.6 trillion yuan, 316.2 billion yuan more than the same period last year [45]. - **Credit**: At the end of February 2026, the balance of domestic and foreign currency loans was 281.52 trillion yuan, a year - on - year increase of 6%. The balance of RMB loans was 277.52 trillion yuan, a year - on - year increase of 6%. In the first two months, RMB loans increased by 5.61 trillion yuan. Household loans decreased by 194.2 billion yuan, and enterprise loans increased by 5.94 trillion yuan [46]. - **Money Supply**: At the end of February 2026, the balance of broad money (M2) was 349.22 trillion yuan, a year - on - year increase of 9.0%; the balance of narrow money (M1) was 115.93 trillion yuan, a year - on - year increase of 5.9%; the balance of currency in circulation (M0) was 15.14 trillion yuan, a year - on - year increase of 14.1%. The net cash injection in the first two months was 1.05 trillion yuan [45]. Inflation Indicators - **CPI**: In February 2026, the domestic CPI increased by 1.3% year - on - year and 1.0% month - on - month. Core CPI increased by 1.8% year - on - year, indicating the recovery of domestic demand. The increase in CPI was mainly due to the Spring Festival factor and the release of consumer demand [52]. - **PPI**: In February 2026, the PPI decreased by 0.9% year - on - year, with the decline narrowing for three consecutive months. It increased by 0.4% month - on - month, with the increase remaining the same for five consecutive months. The improvement of PPI was due to the rise in international commodity prices and the growth of domestic demand in some industries [53]. Overseas Macro - **US Inflation**: In February 2026, the US CPI increased by 2.4% year - on - year, and the core CPI increased by 2.5% year - on - year, both remaining the same as the previous month. The inflation was affected by the rebound of food and energy prices and the decline of core commodities and services. The market has adjusted the interest - rate cut expectation, and the first interest - rate cut by the Fed may be postponed to September or even December [59]. - **US Employment**: In February 2026, the US non - farm employment decreased by 92,000, far lower than the market expectation of an increase of 55,000. The unemployment rate rose to 4.4%, the highest since December 2025. The employment data was affected by multiple factors such as medical strikes, extreme weather, and statistical model adjustments [59]. - **Fed Policy**: In the FOND meeting on January 29, 2026, the federal funds rate target range was maintained at 3.50% - 3.75%, ending the three - consecutive - month interest - rate cut trend. The statement indicated that the US economy was expanding steadily, employment growth was low but the unemployment rate was stable, and inflation was still slightly higher than the 2% long - term target [59]. Interest Rates and Exchange Rates - **Exchange Rate**: In early March 2026, the RMB - US dollar exchange rate showed a significant "V - shaped reversal" and entered a two - way fluctuation range. The central bank lowered the foreign exchange risk reserve ratio for forward foreign exchange sales from 20% to 0 to release a "stable exchange rate" signal. The RMB - US dollar exchange rate is expected to show a pattern of "two - way fluctuation and a steady increase" [65]. - **Interest Rates**: The report also presents data on various interest rates such as DR007, SHIBOR, LPR, and bond yields in China and the US [66][71].

Group 1: Report Core View - In February, the new social financing scale was 2.38 trillion yuan, a year-on-year increase of 14.61 billion yuan. The year-on-year growth rate of social financing stock was 8.2%, the same as last month and the same as the same period last year. The year-on-year increase in new social financing in February was mainly supported by corporate credit. Government bond financing increased by 140.36 billion yuan, a decrease of 29.03 billion yuan compared with the same period last year [3]. - In terms of short - and long - term structure, in the new credit in February, short - term loans and bill financing increased by 9.57 billion yuan. Bill financing decreased by 20.43 billion yuan year - on - year, indicating a decline in the demand for "bill padding". New short - term corporate loans were 60 billion yuan, a year - on - year increase of 27 billion yuan, and new long - term corporate loans were 89 billion yuan, a year - on - year increase of 35 billion yuan. Both short - term and long - term loans in the household sector showed a decreasing trend, indicating insufficient consumer and leverage - adding momentum among residents [3]. - In terms of currency, at the end of February, the balance of broad money (M2) was 349.22 trillion yuan, a year - on - year increase of 9.0%. The balance of narrow money (M1) was 115.93 trillion yuan, a year - on - year increase of 5.9%. The balance of currency in circulation (M0) was 15.14 trillion yuan, a year - on - year increase of 14.1%. The M1 - M2 scissors gap narrowed slightly from - 6.9% in the same period last year to - 3.1%, narrowing by 1 percentage point compared with last month, reflecting an increase in capital activity [3]. Group 2: Data Comparison | Indicator | February 2026 | January 2026 | December 2025 | | --- | --- | --- | --- | | Year - on - year growth rate of social financing stock (%) | 8.2 | 8.2 | 8.3 | | Year - on - year growth rate of RMB loan balance | 6.1 | 6.1 | 6.3 | | Social financing increment (billion yuan) | 237.92 | 722.08 | 220.75 | | RMB loans | 84.84 | 490.16 | 98.04 | | Foreign currency loans | - 0.35 | 4.68 | - 6.75 | | Entrusted loans | - 1.81 | - 1.92 | 3.08 | | Trust loans | 3.09 | - 0.04 | 6.79 | | Undiscounted bills | - 17.55 | 62.93 | - 14.92 | | Corporate bonds | 15.21 | 50.33 | 15.41 | | Government bonds | 140.36 | 97.64 | 68.33 | | Corporate stocks | 4.54 | 2.91 | 5.59 | | M2 (%) | 9.0 | 9.0 | 8.5 | | M1 (%) | 5.9 | 4.9 | 3.8 | | M0 (%) | 14.1 | 2.7 | 10.2 | [4]

1. Report's Industry Investment Rating No information provided regarding the industry investment rating. 2. Core Viewpoints of the Report - In February 2026, the overall credit performance was not weak. Despite a slight decline in credit volume, the financing demand of the enterprise sector met the seasonal pattern, and the long - term loans of enterprises provided obvious support. The social financing growth rate remained stable, and the M2 growth rate was mainly supported by household deposits. After excluding the M0 factor, the month - on - month growth of M1 and M2 was close to the seasonal level. Attention should be paid to the sustainability of enterprise credit repair [3][7][36]. 3. Summary by Relevant Catalogs Credit: Affected by the misalignment of the Spring Festival, household and short - term corporate loans were weak - **Household loans**: In February, household loans faced pressure. Short - term loans decreased by 469.3 billion yuan, 195.2 billion yuan more than the same period last year, mainly because households used year - end bonuses to repay short - term loans. Medium - and long - term loans decreased by 181.5 billion yuan, 66.5 billion yuan more than the same period last year. The year - on - year decline in the transaction area of commercial housing in 30 large and medium - sized cities widened, dragging down medium - and long - term loans. The post - festival property - pushing rhythm of real estate enterprises in March needs to be observed [11]. - **Enterprise long - term loans**: In February, new enterprise long - term loans reached 890 billion yuan, an increase of 350 billion yuan year - on - year. The growth rate rose from 8.2% to 8.5%, which may be related to the project construction at the beginning of the year and the role of policy - based financial instruments [16]. - **Enterprise short - term loans**: In February, new enterprise short - term loans were 600 billion yuan. Although it decreased seasonally compared with the previous month, it was still 270 billion yuan more than the same period last year, indicating the resilience of short - term business turnover demand. Bill financing decreased by 35 billion yuan, 204.3 billion yuan more than the same period last year, suggesting an improvement in the structure of real - economy financing demand [18]. Social Financing: Government bonds faced a high base, and off - balance - sheet bills supported social financing - **Government bonds**: In February, new government bonds were 1.4036 trillion yuan. Due to the high base in the same period last year (1.69 trillion), the year - on - year increase was 290.3 billion yuan less. The issuance rhythm of government bonds in the first quarter was still active, but there might be high - base disturbances from February to March, and in March, it might be about 400 billion yuan less year - on - year. In April, government bonds are expected to support social financing [19]. - **Trust loans and off - balance - sheet bills**: In February, new trust loans were 30.9 billion yuan, 63.9 billion yuan more than the same period last year, reflecting the recovery of infrastructure and some real estate financing demand. Unaccepted bills decreased by 175.5 billion yuan. Due to the low base in the same period last year, the year - on - year increase was 123.2 billion yuan, and the conversion of off - balance - sheet bills to on - balance - sheet was limited, positively contributing to social financing [26]. Deposits: M1 was mainly driven by cash withdrawal, and household deposits increased year - on - year during the Spring Festival month - **M1**: After excluding the impact of Spring Festival cash withdrawal, M1 growth was close to the seasonal pattern. In February, affected by the misalignment of the Spring Festival and strong household cash - withdrawal demand, M0 increased significantly. After excluding cash - withdrawal factors, the new - caliber M1 - M0 decreased by 2.56 trillion yuan in the current month, 500 billion yuan less than in February 2025. The year - on - year growth rate of M1 rose from 4.9% to 5.9%, while the year - on - year reading of M1 - M0 dropped from 5.2% to 4.8% [28]. - **Household and enterprise deposits**: Due to the misalignment of the Spring Festival, household and enterprise deposits showed a seasonal "one increases while the other decreases." In February, household deposits increased by 3.11 trillion yuan, 2.5 trillion yuan more than the same period last year, possibly due to year - end bonus payments. Enterprise deposits decreased by 2.65 trillion yuan month - on - month, 176 million yuan less year - on - year. Non - bank deposits increased by 1.39 trillion yuan month - on - month, 1.44 trillion yuan less than the same period in 2025. The year - on - year growth rate of M2 remained at 9% [32].

Core Insights - The central point of the articles is the significant increase in new RMB loans by banking financial institutions in January, exceeding 4.2 trillion yuan, marking a historical high for the same period. The focus is on enhancing credit support for key industries and sectors to drive economic growth and align with national strategies [1][2]. Group 1: Credit Growth and Focus Areas - In January, new RMB loans exceeded 4.2 trillion yuan, with medium to long-term loans for key industries like manufacturing, new energy, integrated circuits, and biomedicine accounting for 63.7%, an increase of 8.2 percentage points year-on-year [1]. - The banking sector's credit issuance is showing positive trends in speed, volume, and structure, which is crucial for supporting the "14th Five-Year Plan" starting in 2026 [1]. - The focus for 2026 should be on five key areas: technology innovation, green finance, inclusive finance for SMEs, boosting consumption, and supporting manufacturing upgrades and major infrastructure projects [2][3]. Group 2: Credit Strategy and Implementation - Effective credit work requires a clear understanding of the demand in the industrial economy, focusing on the methods, products, and efficiency of credit issuance [4]. - Banks should enhance the precision and coordination of credit issuance, utilizing structural monetary policy tools to ensure funds flow to key areas like technology innovation and green transformation [4][5]. - There is a need for innovative credit products that align with national strategies and market demands, including specialized financial products in technology, green finance, and digital finance [5]. Group 3: Consumer-Centric Credit Approach - Credit issuance should also address the real-life consumption needs of the public, focusing on sectors closely related to people's livelihoods, such as hospitality, tourism, and elder care [6]. - A multi-tiered service system should be established to meet diverse needs, utilizing tools like the central bank's "service consumption and elder care re-loan" to lower funding costs and increase credit availability in consumer sectors [6].

Core Viewpoint - The January financial data indicates a "good start" for social financing in 2026, supported by government and corporate bonds, despite overall weak credit issuance, with new RMB loans in January falling short of the previous year's figures [1][2]. Group 1: Credit Performance - In January, new RMB loans amounted to 4.71 trillion yuan, lower than 5.13 trillion yuan in January 2025, reflecting a year-on-year decrease in social financing of 317.8 billion yuan [2][3]. - The trend of loan pre-positioning is strengthening, with January loans accounting for 22%, 27%, and 32% of annual credit issuance from 2023 to 2025, respectively [2]. - The corporate sector saw a decrease in medium to long-term loans by approximately 280 billion yuan and a reduction in bill discounts by about 360 billion yuan, indicating a shift towards balanced lending practices [1][3]. Group 2: Residential Sector Insights - Residential loans increased by 456.5 billion yuan, with short-term loans rising by 1.1 trillion yuan, while medium to long-term loans decreased by 1.47 trillion yuan [8]. - The real estate market's slow recovery and early repayments are major factors affecting residential loan growth, with January's property sales down 18.9% year-on-year [8][9]. - Short-term loans are seen as a critical indicator for consumer recovery, with their growth attributed to low base effects, holiday influences, and new subsidy policies [8][9]. Group 3: Market Dynamics and Future Outlook - Analysts suggest that the demand for credit post-Spring Festival will be crucial for both corporate and residential sectors, with expectations of continued monitoring of credit structure and volume in February and March [5][7]. - The reduction in bill financing by 873.9 billion yuan indicates banks are reallocating resources towards general loans, reflecting a shift away from aggressive credit growth [7]. - The overall sentiment in the corporate sector remains cautious, with expectations of credit growth being tempered by high base effects and regulatory influences [3][6].

Group 1: Financial Data Overview - In January, the new social financing (社融) increased by 7.2 trillion RMB, with a year-on-year growth of 0.2 trillion RMB[7] - The total social financing stock grew by 8.2% year-on-year, while M2 increased by 9.0% year-on-year[7] - Government bonds and undiscounted bills were the main supports for the increase in social financing[7] Group 2: Loan Trends - Both medium and long-term loans for residents and enterprises saw a year-on-year decrease, while short-term loans increased for both sectors[7] - New loans in January amounted to 4.7 trillion RMB, a decrease of 0.4 trillion RMB year-on-year[7] Group 3: Monetary Supply and Liquidity - M1 and M2 both showed a year-on-year increase, with M1 at 4.9% and M2 at 9.0%[7] - Non-bank deposits continued to increase, indicating a trend towards liquidity in deposits[7] Group 4: Future Outlook - The year-on-year growth of social financing may face downward pressure as the base increases towards July, but is expected to remain above 7%[7] - The central bank is likely to maintain a loose liquidity stance, with M2 expected to stay above 7%[7] Group 5: Risks - Economic recovery may not meet expectations, potentially affecting credit growth and social financing[9] - Uncertainties regarding U.S. Federal Reserve interest rate cuts could impact China's monetary policy[9]

Group 1 - The core viewpoint of the articles highlights a strong start to January's financial data, indicating a supportive monetary policy environment that aids economic stability at the beginning of 2026 [2][3][8] - The broad money supply (M2) grew by 9.0% year-on-year as of the end of January, marking a significant increase of 0.5 percentage points from the previous month, and reaching the highest growth rate in nearly 25 months, exceeding market expectations [3][4] - The narrow money supply (M1) also saw a year-on-year growth of 4.9%, up 1.1 percentage points from the previous month, indicating a recovery in liquidity [3][4] Group 2 - In January, new RMB loans amounted to 4.71 trillion yuan, which is a significant increase of 3.80 trillion yuan month-on-month, although it reflects a year-on-year decrease of 420 billion yuan due to a high base effect from the previous year [5][6] - The total social financing (社融) for January was 7.22 trillion yuan, showing a year-on-year increase of 1,662 billion yuan and a growth rate of 8.2%, supported by government and corporate bond issuances [8][9] - The structure of social financing was primarily driven by government bonds, which accounted for 13.5% of total social financing, the highest level for the same period since 2021 [8][9] Group 3 - The increase in M1 is attributed to a low base effect from the previous year and the implementation of regulations supporting small and medium enterprises [4] - The growth in corporate loans was weaker, with a year-on-year decrease of 330 billion yuan, indicating slow demand for loans despite the seasonal increase in lending [5][6] - Consumer loans showed signs of recovery, with a year-on-year increase of 127 billion yuan, driven by seasonal consumption patterns and improved lending policies [7]

Core Viewpoint - The financial sector is providing strong support for a stable economic start in 2026, with high growth rates in broad money (M2) and social financing, reasonable loan growth, and low loan interest rates [1] Group 1: Credit Growth - As of the end of January, the RMB loan balance reached 276.62 trillion yuan, a year-on-year increase of 6.1%, which is still above the nominal economic growth rate [2] - Corporate loans increased by 4.45 trillion yuan in January, with medium- and long-term loans accounting for over 70%, providing significant support for key sectors like manufacturing and emerging industries [2][3] - Personal loans also saw stable growth due to increased consumer demand ahead of the Spring Festival, supported by government policies extending personal consumption loan interest subsidies [3] Group 2: Financing Channels - By the end of January, the social financing scale reached 449.11 trillion yuan, with a year-on-year growth of 8.2%, indicating effective monetary policy support for the economy [4] - Direct financing channels, including corporate bonds and equity financing, are developing rapidly, with a notable increase in their importance within the social financing structure [5][6] - The proportion of stock and bond financing in social financing scale increments reached 47% in 2025, surpassing the loan proportion [6] Group 3: Policy Support - The People's Bank of China has introduced a series of monetary policies to support the real economy, including adjustments to re-lending tools and interest rates to stimulate credit in key sectors [7] - Fiscal policies have also been proactive, with government bond financing in January reaching 976.4 billion yuan, the highest level for the same period since 2021 [4][8] - The government is expected to continue implementing an active fiscal policy in 2026, with anticipated new government bond issuance close to 1.5 trillion yuan [8]

Group 1: Monetary Statistics - As of the end of January, the broad money supply (M2) reached 347.19 trillion yuan, reflecting a year-on-year growth of 9% [5] - The narrow money supply (M1) stood at 117.97 trillion yuan, with a year-on-year increase of 4.9% [5] - The currency in circulation (M0) amounted to 14.61 trillion yuan, showing a year-on-year growth of 2.7% [5] - In January, a net cash injection of 519.1 billion yuan was recorded [5] Group 2: Social Financing Scale - By the end of January, the total social financing scale was 449.11 trillion yuan, marking a year-on-year growth of 8.2% [2] - The balance of RMB loans to the real economy was 273.3 trillion yuan, with a year-on-year increase of 6.1% [2] - The balance of foreign currency loans to the real economy, converted to RMB, was 1.09 trillion yuan, showing a year-on-year decline of 12.1% [2] - The balance of corporate bonds reached 34.69 trillion yuan, reflecting a year-on-year growth of 6.1% [2] Group 3: Loan and Deposit Statistics - In January, RMB deposits increased by 809 billion yuan, with household deposits rising by 213 billion yuan and non-financial enterprise deposits increasing by 261 billion yuan [6] - The total balance of RMB loans was 276.62 trillion yuan, with an increase of 4.71 trillion yuan in January [7] - The balance of foreign currency loans was 570.1 billion USD, showing a year-on-year growth of 6.6% [7] Group 4: Market Activity - The average weighted interest rate for interbank RMB market lending was 1.4% in January, which is 0.04 percentage points higher than the previous month [8] - The total transaction volume in the interbank RMB market reached 211.96 trillion yuan, with a daily average transaction of 10.09 trillion yuan, reflecting a year-on-year growth of 36.1% [8] Group 5: Cross-Border RMB Settlement - In January, the cross-border RMB settlement amount under the current account was 1.49 trillion yuan, with goods trade accounting for 1.19 trillion yuan [9] - The direct investment cross-border RMB settlement amount was 0.78 trillion yuan, with foreign direct investment contributing 0.51 trillion yuan [9]