Investment Rating - The report maintains an "Outperform" rating for the banking wealth management industry, indicating expected performance above the market benchmark by over 10% [37]. Core Views - The banking wealth management scale continued to grow significantly in May, with a weighted average annualized return of 2.57%, remaining stable compared to the previous month [9][10]. - Regulatory policies are increasingly standardizing wealth management practices, focusing on quality over mere scale growth, with a new classification and rating system for wealth management companies being discussed [1][2]. - The new regulatory framework aims to reduce reliance on performance benchmarks, encouraging investors to focus on underlying assets and risk levels instead [1][2]. Summary by Sections Wealth Management Scale and Returns - In May, the total scale of wealth management products rebounded to 31.3 trillion yuan, an increase of 0.5 trillion yuan month-on-month [10]. - The annualized return for cash management products was 1.49%, while pure bond products yielded 2.69% [9]. Regulatory Environment - The regulatory framework is shifting to emphasize business quality, with a new rating system that includes governance, asset management capability, risk management, and investor protection [1]. - The new policies will allow wealth management products to not disclose performance benchmarks, which may initially confuse investors but ultimately guide them towards more rational decision-making [1][2]. Product Trends - The report predicts a further decline in wealth management product pricing benchmarks by 30-50 basis points [2]. - There is a trend towards long-term liabilities and short-term assets in wealth management configurations, with an increased focus on equity and risk assets [2].

Group 1: Company Overview - COFCO Capital is a holding company involved in various sectors including life insurance, futures, trust, and banking, providing comprehensive financial support to its parent company COFCO Group and a diverse client base [1] - In 2024, COFCO Capital achieved total operating revenue of CNY 25.25 billion, a year-on-year increase of 13.32%, and net profit attributable to shareholders of CNY 1.21 billion, up 18.55% [1] - In Q1 2025, COFCO Capital reported operating revenue of CNY 2.35 billion and net profit of CNY 392 million, maintaining healthy cash assets [1] Group 2: Trust Business Development - COFCO Trust is focusing on the core of trust services, adhering to the service of the real economy and the main responsibilities of the group [3] - The company is advancing structural optimization and risk management to ensure steady growth in its main business [3] - COFCO Trust has developed a comprehensive asset management product system, including cash management, pure debt, and yield-enhancing products [3] Group 3: Futures Business Development - COFCO Futures aims to be a leading domestic provider of industry-specific derivative financial services, focusing on market-oriented, professional, and product-driven principles [4] - The company is enhancing its integrated operational capabilities and providing tailored services to clients in the agricultural sector [5] - COFCO Futures is also expanding its international business and risk management services, adapting to market fluctuations and competitive pressures [5]

Core Viewpoint - The recent decline in deposit interest rates has led to a shift in investor preference towards short-term wealth management products, as banks reduce fees and enhance product offerings to attract customers [1][2][4]. Group 1: Deposit Rate Changes - Major banks initiated a new round of deposit rate cuts on May 20, with the highest rates for 1-year, 2-year, 3-year, and 5-year fixed deposits now at 0.98%, 1.05%, 1.25%, and 1.30% respectively [2]. - The average annualized yield for bank wealth management products rose to 2.70% in April, with cash management products yielding 1.50% and pure bond products yielding 3.34% [2]. Group 2: Wealth Management Product Strategies - Banks are reducing management fees and enhancing their offerings in equity products to attract more investors, particularly small and medium-sized investors who are sensitive to fees [3][4]. - Several banks have announced fee reductions for their wealth management products, including management, custody, and service fees [3]. Group 3: Equity Investment Focus - Banks are increasing their investment in equity assets, particularly through index funds (ETFs), which are seen as a low-cost and transparent way to enter the equity market [4][5]. - The focus on new production capacity and domestic demand sectors is highlighted as a key area for equity asset allocation by wealth management companies [5]. Group 4: Challenges and Future Outlook - The low interest rate environment poses challenges for wealth management institutions, with expectations that performance benchmarks will continue to decline [6]. - There is a need for banks to enhance their investment management capabilities and educate investors about equity products to improve market acceptance [7].

Group 1 - The core viewpoint is that after the recent reduction in deposit rates by major commercial banks, bank wealth management products have regained market attention, with the total scale reaching a historical high of 31 trillion yuan in April [1][2] - The growth in bank wealth management scale is driven by three main factors: the "seesaw" effect between stocks and bonds, the migration of funds from maturing fixed deposits to wealth management products, and increased marketing efforts by banks in the second quarter [1][2] - The weighted average annualized yield of bank wealth management products in April was 2.70%, with cash management products yielding 1.50%, pure bond products yielding 3.34%, and "fixed income +" products yielding 3.01% [1] Group 2 - As of May 20, the total scale of bank wealth management products continued to expand, reaching 31.28 trillion yuan, with expectations for further growth due to the recent reduction in deposit rates [2] - The decline in deposit rates is seen as the most significant short-term driver for the growth of wealth management products, with lower interest rates enhancing the attractiveness of these products compared to traditional deposits [2] - Despite the current growth, challenges are anticipated for the overall annual growth of bank wealth management products due to low credit bond yields and potential net asset value fluctuations [2] Group 3 - Bank wealth management subsidiaries are encouraged to enhance their asset allocation capabilities, focusing on bond investments and diversifying into multi-asset strategies [3] - To improve bond investment capabilities, wealth management subsidiaries should explore credit research, quantitative investment, and utilize government bond futures for hedging or arbitrage [3] - There is a need for building a comprehensive multi-asset allocation capability, including developing diverse asset research capabilities and establishing a collaborative investment team for new product and strategy development [3]

Core Viewpoint - The scale of wealth management products in China has reached a new high, surpassing 31 trillion yuan in May 2023, driven by declining loan rates and a shift towards short-term products as a substitute for deposits [1][3][4]. Group 1: Wealth Management Scale - As of May 20, 2023, the total scale of wealth management products reached approximately 31.3 trillion yuan, an increase of about 1.6 trillion yuan since the beginning of the year [1][2]. - The growth in wealth management products is primarily attributed to short-term products, with a notable increase in daily open-type products and those with a maturity of one month or less [4][5]. - The rapid increase in wealth management scale began in April 2023, coinciding with a more relaxed liquidity environment and a decline in deposit rates by major banks [3][4]. Group 2: Interest Rate Trends - The People's Bank of China announced a comprehensive plan including a 10 basis point interest rate cut and a 50 basis point reserve requirement ratio reduction, with expectations for further rate cuts in the second half of the year [1][6]. - Market analysts predict a continued downward trend in interest rates, which is expected to support the bond market and contribute to a steady increase in wealth management scale [6][7]. Group 3: Product Strategy and Performance - There is a growing trend towards "fixed income plus" strategies in wealth management products, with a small allocation to equity assets as the stock market shows signs of recovery [9][10]. - Wealth management products focusing on cash management and short-term investments are gaining popularity due to their safety and liquidity, often offering higher yields compared to money market funds [5][9]. - The performance of "fixed income plus" products varies significantly, with some achieving notable returns while others lag behind, indicating a diverse performance landscape within the wealth management sector [9][10].

Investment Rating - The report maintains an "Outperform" rating for the banking wealth management industry, indicating that it is expected to perform better than the market by over 10% in the next 6 to 12 months [39]. Core Insights - In April, the scale of bank wealth management returned to historical highs, reaching approximately 30.8 trillion yuan, benefiting from a "weak stock, strong bond" market environment, with an average annualized yield of 2.70%, an increase from the previous month [1][9]. - The growth drivers for bank wealth management include the "seesaw" effect of the current market conditions, the maturity of some fixed deposits, and increased marketing efforts by banks to promote competitive product yields, with new products averaging a yield benchmark of over 2.50% [1][9]. - There is a notable divergence between the growth of wealth management products and liabilities, with a general lack of investment in credit bonds and an increased allocation to certificates of deposit and financial bonds [2]. Summary by Sections Market Trends - The weighted average annualized yield for bank wealth management products in April was 2.70%, with cash management products yielding 1.50%, pure bond products yielding 3.34%, and "fixed income+" products yielding 3.01% [9]. - The total scale of wealth management products increased by 1.8 trillion yuan month-on-month, indicating a recovery in the market [10]. New Issuance - In April, the initial fundraising scale for newly issued products was 352.4 billion yuan, primarily consisting of fixed income products, with most being closed-end products. The average performance benchmark for new products fell to 2.56% [16]. Maturity and Performance - A total of 2,127 closed-end bank wealth management products matured in April, with most achieving their performance benchmarks [26]. Asset Allocation - The primary assets in bank wealth management products include high-grade credit bonds, equity investments through outsourcing, and non-standard assets. The report highlights the performance of these assets over the past year and the last month [29].

Investment Rating - The report maintains an "Outperform" rating for the banking wealth management industry, indicating expected performance exceeding the market benchmark by over 10% [39]. Core Insights - In April, the scale of bank wealth management returned to historical highs, reaching approximately 30.8 trillion yuan, with a weighted average annualized yield of 2.70%, an increase from the previous month [1][9]. - The growth in bank wealth management is driven by a "seesaw" effect due to weak stock performance and strong bond performance, along with increased marketing efforts by banks [1]. - There is a notable misalignment between the growth of wealth management products and liabilities, with banks increasing their allocation to certificates of deposit and financial bonds rather than credit bonds [2]. Summary by Sections Market Trends - The average annualized yield for cash management products is 1.50%, while pure bond products yield 3.34%, and "fixed income+" products yield 3.01% [9]. - The total scale of wealth management products increased by 1.8 trillion yuan month-on-month in April [10]. New Issuance - In April, the initial fundraising scale for newly issued products was 352.4 billion yuan, primarily consisting of fixed income products, with most being closed-end products [16]. - The average performance benchmark for newly issued products fell to 2.56% in April [16]. Maturity and Performance - A total of 2,127 closed-end bank wealth management products matured in April, with most meeting their performance benchmarks [26]. Asset Allocation - The primary assets in bank wealth management products include high-grade credit bonds and equity investments through outsourcing, with recent performance data provided [29].