Group 1 - Ping An Life has increased its stake in China Merchants Bank H-shares by 6.2955 million shares, surpassing a 15% holding and triggering a third round of shareholding disclosure [1] - In 2023, Ping An Group and its subsidiaries have been actively increasing their holdings in H-shares of major banks such as ICBC, Agricultural Bank of China, Postal Savings Bank, and China Merchants Bank [1] - The preference for H-shares over A-shares is attributed to higher dividend yields and lower valuations, with the H-share financial ETF showing a 12-month dividend yield of 8.15% compared to 5.35% for the A-share banking index [1] Group 2 - Stable and high dividend income from H-shares provides continuous cash flow for insurance funds, aiding in the long-term stable operation of insurance capital [2] - Individual investors are advised to consider index investment tools, such as the Hong Kong Stock Connect Financial ETF or the Hong Kong Central State-Owned Enterprises Dividend ETF, to achieve similar effects while diversifying risks [2]

Group 1 - The Hong Kong stock market has shown strong growth momentum in 2023, with the Hang Seng Index rising 20.45% year-to-date as of June 10, indicating a potential technical bull market [1] - The continuous inflow of southbound funds has played a crucial role in this upward trend, with a net inflow of 6320.32 billion yuan so far this year, approaching last year's total of 7440.31 billion yuan [1] - In the first quarter of 2023, southbound funds recorded a net purchase of 4113.25 billion yuan, marking the highest quarterly net buying since the launch of the mutual market access mechanism [1] Group 2 - Analysts suggest that in a declining interest rate environment, undervalued high-dividend bank H-shares are a favorable option for medium to long-term investment [2] - For individual investors seeking stable cash flow, it is recommended to consider index investment tools such as the Hong Kong Stock Connect Financial ETF and the Hong Kong Central State-Owned Enterprises Dividend ETF, which focus on low valuation and high dividend yields [2] - As of June 10, the bank H-share component in the Hong Kong Stock Connect Financial ETF exceeds 65%, while the tracked index of the Hong Kong Central State-Owned Enterprises Dividend ETF has a dividend yield of 7.84% over the past 12 months [2]

Investment Rating - The report maintains an "Overweight" rating for the industry [1] Core Insights - The industry is experiencing continuous fluctuations, with a focus on the turning points of dividend and growth styles [19][20] - The macro model indicates that the market may face adjustment pressure in the near term, with a potential for a slight rebound later in June [19][24] - The report highlights the importance of monitoring event-driven impacts, particularly regarding U.S. tariff policies [20] Market Overview (May 26 - May 30, 2025) - Major broad-based indices showed varied performance, with the top three being North Securities 50 (up 2.82%), Wind Micro-Equity Daily Equal Weight Index (up 2.65%), and CSI 2000 (up 1.09%). The bottom three were ChiNext Index (down 1.40%), Shanghai 50 (down 1.22%), and CSI 300 (down 1.08%) [9][10] - Style indices also varied, with small-cap value (up 0.56%) and large-cap growth (down 2.71%) showing significant differences [10][13] - Among the Shenwan first-level industry indices, Environmental Protection (up 3.42%) and Pharmaceutical Biology (up 2.21%) performed well, while Automotive (down 4.11%) and Electric Equipment (down 2.44%) lagged [14][15] Market Outlook (June 3 - June 6, 2025) - The market is expected to remain volatile, with a focus on the transition between dividend and growth styles [19] - The macro model for June indicates a score of 0, suggesting a generally flat performance for the month, with potential for a slight increase after initial adjustments [24] - The report anticipates that the dividend style may face headwinds while the growth style could perform better in the latter half of June [19][20] Fund Allocation Recommendations - The report suggests a balanced allocation strategy for ETFs, anticipating a period of market adjustment [20]