Group 1 - Southbound funds continue to increase their positions in Hong Kong stocks, with a focus on the banking sector. The bank ETF (517900) has seen net inflows for seven consecutive days, with a year-to-date growth of 221.71%, reaching a historical high [1] - The banking industry is set to benefit from multiple policy advantages by May 2025. The People's Bank of China has lowered the provident fund loan interest rate by 0.25 percentage points, which supports housing demand and stabilizes the real estate market [1] - The central bank has also reduced the reserve requirement ratio for financial institutions by 0.5 percentage points, and for auto finance and financial leasing companies by 5 percentage points, which releases liquidity and alleviates pressure on bank interest margins [1] Group 2 - The LPR was first lowered in 2025, with the one-year LPR dropping to 3.0% and the five-year LPR to 3.5%. The six major banks have also lowered deposit rates, with the maximum reduction reaching 25 basis points, further easing the downward trend of bank net interest margins [1] - The China Securities Regulatory Commission has released an action plan to promote the high-quality development of public funds, guiding capital allocation towards underweighted bank stocks in broad-based indices, which brings potential incremental capital to the sector [1] - Hu Nong Commercial Bank and Yu Nong Commercial Bank have been included in the CSI 300 Index, promoting valuation recovery [1][2]