On May 26, major A-share indices closed lower collectively. The Shanghai Composite Index and Shenzhen Component Index both fell over 0.8%, the Beijing Stock Exchange 50 Index dropped 2.71%, the STAR 50 Index declined 2.88%, and the STAR Composite Index fell 2.7%. More than 4,500 stocks across the market declined.
Influenced by the confirmed IPO hearing date for Unitree Robotics, humanoid robot concept stocks rose in early trading. Daye Metal Forming Co.,Ltd. and Shenzhen Woer Heat-Shrinkable Material Co.,Ltd. hit the daily limit-up, while Zhejiang Zhongda Intelligent Equipment Co.,Ltd. and Beijing Capital Development Co.,Ltd. touched the limit-up. Keanda Intelligent Control Co.,Ltd. surged over 18%, and Swancor Advanced Materials Co.,Ltd. gained over 13%.
PCB concept stocks strengthened repeatedly, with Shengyi Technology Co.,Ltd. and Shennan Circuits Co.,Ltd. both reaching record highs. Huasu Holdings Co.,Ltd. secured two consecutive limit-up boards. The power sector was active, with Huadian Energy Company Limited achieving two consecutive limit-ups and Shanghai Electric Power Co.,Ltd. hitting the daily limit-up.
On the downside, the semiconductor, memory chip, and computing power hardware industry chains declined across the board. Cheng Bang Co.,Ltd. fell by the daily limit, Dapu Microelectronics Co.,Ltd. dropped over 11%, and Xingyun Technology Co.,Ltd. declined over 10%. Tongyu Technology Inc., Netac Technology Co.,Ltd., Jiangbolong, and Demingli led the losses. Cambricon Technologies Corporation Limited's stock price hit another record high, briefly rising nearly 3% during the session, closing the morning session up 0.29%.
Fiber optic concept stocks adjusted, with Sanwang Communication Co.,Ltd. falling over 10%. Tongding Interconnection Co.,Ltd. and Hangzhou Cable Co.,Ltd. were among the top decliners.
The precious metals sector saw unusual activity with a surge, as Zhaojin Mining Industry Company Limited hit the daily limit-up. Spot gold and silver experienced a sharp intraday drop and are currently slightly lower; futures for gold and silver saw narrowed gains.
Hong Kong chip stocks also retreated from highs, with the Hang Seng Tech Index's gains narrowing. At the time of writing, Lenovo Group surged over 16%, Huahong Semiconductor gained over 10% after earlier rising nearly 20%, and Semiconductor Manufacturing International Corporation rose over 7%.
A-Share Market Cap Leader Changes Hands During early trading on the 26th, A-share financial stocks strengthened. China Construction Bank Corporation rose over 2%, hitting a new intraday high and entering the top ten A-share listed bank stocks by price. Its latest market capitalization reached 2.7 trillion yuan, surpassing Industrial And Commercial Bank Of China Limited (2.5 trillion yuan) to rank first in the A-share market. As of the morning session on the 26th, China Construction Bank Corporation has accumulated an 11.5% gain year-to-date.
Boosted by its year-to-date rise, China Construction Bank Corporation's valuation metrics have increased. As of the close on the 25th, its price-to-earnings ratio and price-to-book ratio reached 7.76 times and 0.75 times, respectively, showing slight improvements from 7.2 times and 0.7 times at the end of last year. All 42 bank stocks remain in a state of trading below net asset value.
A recent wave of dividend distributions by listed banks may be one factor behind the banking sector's strength. According to statistics from Tonghuashun, among 42 A-share listed banks, 41 have distributed dividends to shareholders. Including interim dividend amounts from 32 banks, listed banks' total dividend payout for 2025 amounts to 645.6 billion yuan.
Banking Profits Improve In terms of performance, bank profits are also improving. First-quarter reports for all 42 listed banks have been disclosed, with 37 banks reporting positive year-on-year growth in net profit attributable to shareholders for Q1. Among them, six banks achieved double-digit growth in net profit attributable to shareholders.
In terms of absolute net profit, the four major state-owned banks maintain a clear advantage. Industrial And Commercial Bank Of China Limited leads significantly in total net profit. Its first-quarter report, released on April 29, shows Q1 operating income of 2.3037 trillion yuan, a year-on-year increase of 8.27%, and net profit attributable to shareholders of 869.41 billion yuan, up 3.31% year-on-year. As of the reporting period end, ICBC's total assets reached 55.8 trillion yuan, an increase of 2.3 trillion yuan or 4.29% from the end of the previous year.
The other three major banks, China Construction Bank Corporation, Agricultural Bank Of China Limited, and Bank Of China Limited, reported net profits attributable to shareholders of 862.91 billion yuan, 751.85 billion yuan, and 566.31 billion yuan, respectively.
China Construction Bank Corporation recorded the fastest operating income growth, up 11.15% year-on-year. The key driver was non-interest income. In Q1, the bank's non-interest income reached 577.88 billion yuan, a 20.02% increase from the same period last year, the highest growth rate among major state-owned banks. Fee and commission net income contributed 399.78 billion yuan, up 6.72% year-on-year.
Regarding asset size, Industrial And Commercial Bank Of China Limited's assets exceed 55 trillion yuan, reaching 55.77 trillion yuan, a 4.29% increase from the end of last year. Agricultural Bank Of China Limited's total assets surpassed 50 trillion yuan for the first time, reaching 51.03 trillion yuan, up 4.60% from year-end. China Construction Bank Corporation and Bank Of China Limited reported assets of 47.13 trillion yuan and 39.59 trillion yuan, respectively.
In terms of net interest margin, major state-owned banks still showed significant "profit concessions." In Q1 2026, Postal Savings Bank Of China Co.,Ltd. had the highest net interest margin at 1.65%, down 1 basis point from the end of last year. China Construction Bank Corporation ranked second at 1.36%, while the other four major banks were all below 1.3%.
Analyst Liu Feiran from Guosheng Securities believes the current investment focus in the banking sector centers on the valuation recovery driven by core revenue growth. The sector offers strong certainty of profit recovery and high dividend attributes, further highlighting its defensive and offensive allocation appeal.
He primarily recommends two investment themes. First, high-quality regional city commercial banks with strong fundamental certainty and significant earnings growth potential, prioritizing economically strong provinces with leading prosperity. These banks benefit from regional economic advantages, offering stronger asset expansion momentum and credit deployment capabilities. Second, state-owned and joint-stock banks with attractive dividend yields. Major state-owned banks maintain steady credit deployment, demonstrate resilient net interest margins amid stabilizing corporate loan rates, and showed clear revenue recovery in Q1. In a low-interest-rate environment, their high-dividend attributes enhance their allocation value, making them a core choice for long-term capital's defensive holdings. Attention is also on joint-stock banks with lower valuations and positive growth. As the property market gradually stabilizes and the economy continues to recover, quality joint-stock banks are expected to have significant valuation recovery potential.
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