Zheshang Securities' Top Banking Analyst Liang Fengjie: Bank Stocks Poised for Q4 Rebound, Recommends Stable High-Dividend State Banks

The 7th Sina Finance Golden Qilin Best Analysts Ranking has been announced, with Liang Fengjie's team from Zheshang Securities securing the top position in the banking sector. Here are Liang's latest research insights:

1. Credit: Excluding bills and non-bank institutions, October credit growth turned negative. - Retail sector: Weak consumption and property market pressures persist. October saw a RMB 360.4 billion decline in household loans, down RMB 520.4 billion YoY, reflecting shrinking credit demand. - Corporate sector: Limited demand for medium-to-long term loans. Corporate loans increased by RMB 350 billion YoY, but short-term loans fell by RMB 190 billion while bill financing rose sharply by RMB 500.6 billion.

2. Social financing: Government bond support weakened. October's social financing grew by RMB 815 billion, down RMB 597 billion YoY, with government bond issuance declining by RMB 560.2 billion YoY.

3. M1/Deposits: Deposit migration continues. - M1 growth slowed to 6.2% YoY, while M2 expanded by 8.2%. - Household deposits dropped by RMB 1.3 trillion YoY, while non-bank deposits surged by RMB 1.9 trillion. Wealth management product balances hit a record RMB 33.2 trillion.

Investment Recommendations: - Q4 presents a rebound opportunity for bank stocks amid low valuations and potential high-dividend fund inflows. - Strategy: "State banks as anchors, regional banks for growth." Key picks: - Smaller banks: SPD Bank, Bank of Shanghai, Chongqing Bank, Nanjing Bank, Industrial Bank. - Large state banks: ABC, BOC, ICBC (A-shares); ABC, ICBC, BOC (H-shares).

Liang Fengjie's Q3 2025 Banking Sector Review: 1. Performance Overview: - Listed banks' revenue grew 0.9% YoY, with profits up 1.6%. State banks outperformed, while joint-stock and city commercial banks saw better-than-expected NIM improvements.

2. Key Drivers: - Asset growth slowed to 9.3% YoY, but NIM stabilized (+0.3bp QoQ to 1.37%). - Fee income improved (+4.6% YoY) due to capital market recovery, while trading income declined. - Asset quality remained stable overall, though retail NPLs edged up.

3. Dividend Trends: - More banks introduced interim dividends in 2025, including CMB, Industrial Bank, and regional lenders. - Some banks raised payout ratios, with Changshu Bank increasing by 5.5 percentage points.

Outlook: Bank stocks are poised for valuation recovery in Q4 as market sentiment rebalances. Top picks include regional banks in developed areas and high-dividend state banks like ABC and BCOM.