According to a research report released by China Securities Co., Ltd. (601066), the short-term performance of the securities sector is mainly affected by high-level market consolidation, but high trading volume, stabilized margin financing, optimized financing structure, and low valuation percentiles still support mid-term allocation value.
In the insurance sector, allowing insurer funds to invest in Stock Connect ETFs further expands the toolbox for cross-border equity allocation by insurer funds, helps ease QDII quota constraints, improves allocation efficiency, and is expected to help insurance funds better consolidate long-term interest spreads through diversified asset allocation in a low-interest-rate environment. Hong Kong non-bank interim results are improving while valuations remain low, and under a tight-balance pattern in the second half, the resonance between fundamental improvement and valuation repair may present structural opportunities. With policy dividends and technology dividends reinforcing each other, the report recommends closely following the main line of "low valuation + high dividend + high growth." The main views of China Securities Co., Ltd. are as follows:
Securities Industry View
From September 21 to September 24, the average daily turnover in the A-share market was 1,913.507 billion yuan, up 5.72% week-on-week and down 17.28% year-on-year. Market turnover gradually fell back from the previous range above 2 trillion yuan to around 1.9 trillion yuan, indicating somewhat cooler trading activity. In terms of weekly rhythm, the market fluctuated and rebounded on Monday, with all three major indices closing higher; sectors such as pharmaceuticals and real estate, which had undergone more correction earlier, strengthened in a concentrated manner, while technology stocks also recovered. In the following trading days, the market rose then fell back, with more decliners than advancers, turnover gradually contracted from above 2 trillion yuan, and some funds choosing to wait and see near the holiday. In terms of sector rotation, the main line of industry rotation this week shifted from the previous "seesaw between heavyweight and technology" to "high-low switching and style rebalancing": low-position directions such as pharmaceuticals and real estate were active in stages, themes such as humanoid robots took turns performing, the AI hardware chain including communications and components fluctuated at high levels with intensified internal divergence, and some funds continued to rotate toward dividend and cyclical directions. Overall, the current market is in a stage of high-level consolidation, with both declining volume and faster sector rotation coexisting; going forward, it is necessary to track changes in volume and the sustainability of fund flows.
Margin financing and securities lending balances have rebounded overall but remain at historical highs. As of September 23, 2026, the margin financing and securities lending balance across the Shanghai, Shenzhen, and Beijing markets reached 2,655.008 billion yuan, up about 4.50% from the beginning of the year and up 0.64% week-on-week, accounting for 2.66% of the A-share free-float market capitalization. Since the beginning of the year, margin balances have generally maintained positive growth, indicating that market risk appetite is still in a repair channel and that leveraged funds have not fundamentally shifted their expectations for the market outlook. At present, the share of margin balances in free-float market capitalization is stable at around 2.7%, leverage levels are basically matched with market capitalization expansion, and systemic leverage risk is generally controllable. If margin balances can stabilize at the current high platform or even resume an upward trend, it would further confirm the sustainability of incremental capital entering the market and provide additional liquidity support.
The pace of IPOs and refinancing remains stable, focusing on new quality productive forces. In terms of IPO issuance, based on listing date statistics, 18 companies listed in September 2026 (through the 24th), raising 20.445 billion yuan; in terms of refinancing, corporate equity refinancing totaled 46.056 billion yuan. From the perspective of issuance structure, the IPO market continues to be led by technology companies, with listed and filed targets concentrated in core tracks of new quality productive forces such as semiconductors, artificial intelligence, and new energy, and the industry distribution is highly consistent with the direction of industrial structure upgrading. The institutional inclusiveness of the STAR Market and ChiNext continues to strengthen, the listing channel for unprofitable hard-tech companies has been further broadened, and the review efficiency for high-quality technology companies has improved. In refinancing, private placements still occupy the dominant position in equity financing, and policy continues to optimize around three directions: support for high-quality companies, adaptation for science and innovation enterprises, and mechanism facilitation. As a stock-bond hybrid instrument, convertible bonds have expanded their role in the refinancing system. Overall, while maintaining a stable pace, the equity financing market is tilting its resource allocation function toward technological innovation, and the institutional foundation for the capital market to serve the real economy and support the development of new quality productive forces continues to be consolidated.
In terms of public funds, scale continued to grow, while the proportion of equity funds decreased slightly. According to Tonghuashun statistics, as of September 24, the net asset value of China's public funds reached 38.98 trillion yuan (excluding the market value of ETF feeder funds; ETFs use the latest on-exchange scale), up 6.06% from the end of 2025. Compared with the end of 2025, the net asset value proportion of equity funds decreased by 3.74 percentage points from 14.80% to 11.06%, bond funds increased by 1.75 percentage points from 30.21% to 31.96%, and mixed funds increased by 2.07 percentage points from 9.95% to 12.02%. Since 2026, with the official completion of the three-stage fee reform, the implementation of performance benchmark guidelines, new disclosure rules mandating disclosure of core indicators such as the proportion of profitable investors, and performance assessment management guidelines raising the weight of medium- and long-term assessments of more than three years to above 80% and establishing a mechanism linking shareholder dividends with investor profits and losses, the public fund industry's transition from "scale orientation" to "return orientation" has gained institutional support. The coordinated efforts of these policies mark that China's public fund industry has fully entered a new stage centered on investor interests and aimed at high-quality development. In terms of individual stocks, the report continues to favor three main lines: 1) securities firms with abundant technology project reserves and differentiated competitiveness in large investment banking business; 2) securities firms and fintech targets leading in market share and revenue elasticity in large wealth management business; 3) leading securities firms whose ROE center is expected to rise, driven by accelerated internationalization from a medium- and long-term perspective.
External environment: In the short term, the possibility of the Federal Reserve turning to rate cuts is relatively low, and the policy focus remains on suppressing inflation. The September 16 FOMC meeting voted 12-0 to raise rates by 25 basis points, lifting the federal funds rate target range to 3.75%-4.00%, the first tightening since July 2023. The median dot plot released the same day showed the end-2026 rate expectation at 4.1%, corresponding to possibly one more hike within the year, unchanged in 2027, and possible rate cuts only in 2028. The background supporting this path is that August CPI rose 3.4% year-on-year, the Federal Reserve raised its 2026 core PCE inflation forecast to 3.4%, and inflation stickiness remains; meanwhile, the labor market remains solid, with August nonfarm payrolls increasing by 162,000 and the unemployment rate maintained at 4.1%. Economic resilience provides room for policy to maintain a restrictive stance. This week's U.S. economic data were relatively light, with attention mainly on marginal changes in the September PMI, initial jobless claims, and durable goods orders. The opening of the subsequent rate-cut window depends on confirmation of a downward inflation trend and clearer signs of weakening in the labor market; before that, high market interest rates may persist.
Insurance Industry View
On September 24, 2026, according to China Securities Journal, the General Office of the National Financial Regulatory Administration recently issued a letter to local financial regulatory bureaus, insurance group (holding) companies, insurance companies, and insurance asset management companies clarifying the regulatory caliber for insurance funds investing in Stock Connect ETFs. The document clarifies the relevant regulatory caliber: insurance institutions that may invest in Stock Connect stocks under regulatory rules may invest in Stock Connect ETFs, and shall refer to the relevant regulatory rules for insurance funds investing in Stock Connect stocks. This regulatory caliber took effect on September 20. We believe the main impacts of allowing insurance funds to invest in Stock Connect ETFs include:
First, it helps expand the toolbox for cross-border equity allocation by insurer funds, ease QDII quota constraints, and improve the availability and execution efficiency of overseas allocation. In the past, insurance funds increasing overseas asset allocation generally faced the constraint of scarce QDII quotas. Allowing insurer funds to invest in Stock Connect ETFs adds a regular overseas equity allocation channel that does not occupy QDII quotas. The market continues to be in a low-interest-rate environment, yields on fixed-income assets for insurance funds are thinning, and asset shortage pressure in the industry is prominent. Stock Connect ETFs are standardized overseas equity investment tools with high deployment efficiency. On one hand, they can enrich equity investment categories and help increase overall investment returns; on the other hand, they can further optimize asset portfolio structure, improve asset diversification, and effectively improve the overall risk-return profile of the portfolio. It should be particularly noted that the investment targets of Stock Connect ETFs are not limited to the Hong Kong stock market. Southbound Stock Connect ETFs require that the underlying index have both Hong Kong Stock Exchange-listed stock weight and Stock Connect stock weight of no less than 60%, and may allocate to other market stocks within a certain proportion. At present, some southbound Stock Connect ETF products invest not only in Hong Kong stocks but also in stocks listed in other overseas markets such as the United States, South Korea, and Japan.
Second, it helps optimize the portfolio construction model for insurer funds and improve asset allocation and rebalancing efficiency. Compared with directly investing in overseas individual stocks, ETFs have the natural advantages of basket asset holdings, transparent investment rules, convenient trading mechanisms, and low position concentration. By allocating to Stock Connect ETFs, insurer funds can quickly build cross-border equity strategy exposure, flexibly adjust portfolio industry weights, and reduce market impact costs caused by large-scale position adjustments. In stages when market styles rotate rapidly, industry rotation accelerates, or insurer funds need to rebalance their asset portfolios internally, the advantages of efficient ETF allocation and convenient rebalancing will become more prominent. At the same time, relying on the diversified basket holdings of ETFs, insurer funds can effectively reduce risk exposure to a single target, lower non-systematic risk in the investment portfolio, and improve overall portfolio stability.
Third, leading insurers with strong capital strength are expected to benefit more significantly. Stock Connect ETFs are classified as overseas equity assets and carry relatively high capital occupation attributes, placing higher requirements on insurance companies' capital strength and solvency levels. Leading insurers have abundant capital reserves, higher comprehensive solvency adequacy ratios, and stronger risk resistance, giving them more ample capital space to allocate to Stock Connect ETFs and fully use this tool to achieve cross-market asset diversification and optimize long-term investment returns.
On September 24, 2026, the National Financial Regulatory Administration released the August 2026 monthly operating situation of the insurance industry. In life insurance, from January to August, cumulative original insurance premium income was -0.2% year-on-year, with life insurance, accident insurance, and health insurance at +0.04%, -10.0%, and -1.08% year-on-year respectively; in August alone, life insurance original insurance premium income was -13.6% year-on-year, with life insurance, accident insurance, and health insurance at -15.1%, -6.9%, and -4.6% year-on-year respectively. In property insurance, from January to August, cumulative original insurance premium income was +2.2% year-on-year, with auto insurance and non-auto insurance at flat and +4.4% year-on-year respectively; in August alone, property insurance original insurance premium income was +1.8% year-on-year, with auto insurance and non-auto insurance at -0.02% and +4.5% year-on-year respectively. From January to August, the cumulative loss ratio rose 0.28 percentage points year-on-year to 58.6%; in August alone, the loss ratio rose 0.1 percentage point year-on-year to 75.3%.
On September 24, 2026, the National Financial Regulatory Administration issued an announcement on the 2025 motor vehicle traffic accident liability compulsory insurance business situation. It noted that in 2025, compulsory traffic accident insurance coverage continued to expand, with insured motor vehicles reaching 386 million, up 3.8% year-on-year. Among them, insured automobiles totaled 347 million, up 3.9% year-on-year. Risk protection capacity was effectively strengthened, with compulsory traffic accident insurance coverage amounting to 76.8 trillion yuan that year, up 3.4% year-on-year. Compensation payments that year reached 252.4 billion yuan, up 11.6% year-on-year, and the role in protecting people's livelihoods improved significantly. Premium income grew steadily, with compulsory traffic accident insurance premium income at 285.2 billion yuan that year, up 5.2% year-on-year. Average premium per vehicle remained basically stable, with average compulsory traffic accident insurance premium per vehicle at 762.1 yuan that year, down 0.1% year-on-year. Affected by factors such as higher compensation standards for personal injury protection and a higher share of new energy vehicles, compulsory traffic accident insurance operations posted a loss of 23 billion yuan that year. At the same time, the insurance industry continued to strengthen regulation, standardize disorderly competition, and promote cost reduction and quality improvement. From January to August 2026, the industry's comprehensive cost ratio for auto insurance fell to 95.8%, and management and operations continued to optimize.
We believe the investment main line for the insurance sector is expected to gradually shift to valuation repair based on medium- and long-term value and high-dividend allocation investment opportunities. Looking ahead to the third quarter, both the asset and liability sides face some pressure of weaker quarter-on-quarter growth under a high base in the same period last year, and the main upward driver for share prices is expected to shift from interim report earnings growth to valuation repair based on medium- and long-term value and high-dividend allocation demand. The fourfold positive resonance of strong resident demand for savings-type insurance, favorable industry "anti-involution" policies, channel-side efforts to expand incremental business, and high-quality transformation of participating insurance makes the long-term fundamental improvement trend of listed insurers clear. If subsequent macroeconomic policy support exceeds expectations, it could become a catalyst for sector valuation repair. Overall, at the current position, the medium- and long-term allocation value of the insurance sector is prominent. If potential pressure on third-quarter performance growth under a high base causes short-term share price disturbances, it is recommended to seize the opportunity to position on dips, and we are optimistic about valuation repair based on medium- and long-term value and high-dividend allocation investment opportunities.
Hong Kong Market and HKEX View
Hong Kong non-bank interim results are improving while valuations are low, and under a tight-balance pattern in the second half, the resonance between fundamental improvement and valuation repair may present structural opportunities. Since September, the Hong Kong stock market has adjusted, with the Hang Seng Index down 4.13% and the Hang Seng Tech Index down 6.67%, underperforming the MSCI World Index's 3.93% gain. On the asset side, as of September 25, the total market capitalization of Hong Kong stocks was 45.27 trillion Hong Kong dollars, down 3.99% from the end of August; on the fund side, since September, Hong Kong stock trading activity has declined; ADT was 204.878 billion Hong Kong dollars, down 11.05% quarter-on-quarter; among this, southbound capital ADT fell 18.99% quarter-on-quarter, accounting for 21.21%. Derivatives trading volume also declined, with futures ADV at 530,000 contracts, down 0.70% quarter-on-quarter and down 20.44% year-on-year; options ADV at 920,000 contracts, up 11.54% quarter-on-quarter and down 21.20% year-on-year. In terms of interest rates, HIBOR rates have risen again since September; as of September 25, 6M HIBOR reached 3.51%, up 0.29 percentage points quarter-on-quarter and up 0.63 percentage points year-to-date; as HIBOR remains high, HKEX investment income is expected to remain elevated, and the "hedging" effect is expected to become more prominent. From the perspective of the share of short-selling turnover, short-selling activity in Hong Kong stocks has increased; in September, the share of short-selling turnover in Hong Kong stocks rose 3.94 percentage points quarter-on-quarter to 20.85%; from the latest updated short position ratio in Hong Kong stocks, as of September 25, the proportion of short positions in total market capitalization rose 0.02% from the end of August to 2.39%.
How should Hong Kong stock trading activity be viewed in the fourth quarter? In the fourth quarter, Hong Kong stock trading activity is likely to continue a "tight balance" pattern, conditions for a full-scale volume-driven upward move are not yet sufficient, and structural rotation remains the main theme. In the first half of 2026, the Hong Kong stock market experienced a round of adjustment, with the Hang Seng Index falling 10.73% cumulatively and the Hang Seng Tech Index falling 18.92%. At dawn Beijing time on September 17, the Federal Reserve announced it would raise the federal funds rate target range by 25 basis points to 3.75%-4.00%, the first tightening since July 2023, with the decision passed unanimously by 12 votes. The median dot plot indicated possibly one more rate hike before the end of 2026, with rates unchanged in 2027. After the decision, the 10-year U.S. Treasury yield rebounded above 5%, the U.S. dollar index broke above 100, and global risk assets came under broad pressure. External liquidity constraints have shifted from expectation to reality, and high rates may persist longer than previously judged, leaving investor sentiment cautious. Based on the current dynamic assessment, Hong Kong stock trading activity in the second half is more likely to show structural differentiation rather than an overall jump. From the perspective of external liquidity and capital structure, valuation suppression under the Hong Kong dollar's linkage with the U.S. dollar, as well as divergent behavior between domestic and foreign capital, are the two main lines on the fund side. Under the linked exchange rate system, Hong Kong interbank rates generally approach U.S. dollar rates. After the Fed's September rate hike, the Hong Kong Monetary Authority immediately followed by raising the base rate by 25 basis points to 4.25%. Hong Kong dollar rates will remain high along with the U.S. dollar, posing阶段性 pressure on Hong Kong stock valuation repair. On the domestic capital side, the previously record southbound inflows slowed somewhat in 2026, with the pace of inflows fluctuating. In terms of allocation structure, funds show "barbell-shaped" repositioning characteristics, moving from high-valuation internet sectors to high-dividend sectors and directions such as innovative drugs and new consumption. On the foreign capital side, given remaining uncertainty about the Fed's policy path, institutions differ on the expected timing of rate-cut initiation, and the strength of systematic foreign repositioning in the fourth quarter is questionable. Overall, southbound inflows in the second half may be higher than in the first half and are still expected to be the main source of incremental capital, but the full-year fund side is likely to remain in a tight balance.
From the perspective of asset supply and earnings repair, asset structure optimization and supply-side pressure coexist, and earnings verification remains the core variable. On one hand, hard-tech companies continue to actively list in Hong Kong, and the listing reserve pipeline provides underlying support for medium- and long-term liquidity; on the other hand, in the second half, the unlocking of restricted shares combined with the concentrated release of IPOs and refinancing will test the market's capacity to absorb supply, and existing funds face diversion pressure. At the earnings level, profit repair in Hong Kong's non-financial sector is expected to continue in the second half, but overall corporate earnings growth remains weaker than previously expected, and the market is shifting from "valuation-driven" to "earnings verification," requiring a resonance signal of upward revisions to earnings expectations. In summary, whether Hong Kong stock trading activity can continue in the second half depends on a threefold game: first, the pace of Federal Reserve policy evolution under Warsh's leadership; the September rate hike has landed, but the dot plot shows one more hike may still be possible within the year, and guidance that rates remain unchanged in 2027 means the timing of external liquidity easing may be delayed, with subsequent meetings and inflation data remaining important observation points; second, whether the pace of southbound inflows can remain stable; third, the dynamic balance between expanded new share supply and the market's capacity to absorb funds. Under the dual constraints of tightening external liquidity expectations and slow internal earnings repair, Hong Kong stocks in the second half are more likely to show structural activity under a "tight balance" rather than a broad volume-driven upward move. High-dividend defensive sectors and high-prosperity tracks such as AI applications, innovative drugs, and new consumption may continue to show rotation characteristics, while traditional internet and financial sectors may come under relative pressure. A substantive reversal in market trends still requires a resonance signal of upward earnings expectation revisions and improvement in the external liquidity environment.
Consumer Finance Industry View
Driven by the implementation of the Regulations on Explicit Disclosure of Comprehensive Financing Costs for Personal Loan Business (hereinafter referred to as the "new comprehensive financing cost rules"), strengthened consumption promotion policies, and AI technology efficiency gains, the consumer finance industry is shifting from "implicit pricing gaming" to "explicit cost competition." The industry is in a resonance period of policy dividend release and technology dividend realization. Such institutions, relying on first-mover compliance advantages and refined operational capabilities, can both capture the beta of industry volume-price-quality repair and build excess return alpha through technological barriers. They are currently in a double-hit window of earnings realization and valuation repair.
(1) Industry fundamentals: triple resonance of "stable volume, rising price, and better quality," with the 2026 valuation repair cycle established. Volume: penetration rate improvement offsets stock competition. In 2026, macro stimulus combined with economic recovery will continue to raise the penetration rate of online credit services. Despite stricter regulation, leading consumer finance and loan facilitation institutions, relying on compliant traffic and scenario advantages, are expected to maintain steady loan volume growth of +5%-10% year-on-year. Price: transparency in comprehensive financing costs forces interest spreads to stabilize. The "new comprehensive financing cost rules" mandate disclosure of all fees, eliminating gray fee-charging space. Although this suppresses nominal interest rate ceilings in the short term, in the long term, with normalized ABS issuance, AI technology reducing per-customer operating costs, and improved risk costs, industry revenue growth is expected to return to double digits. Pricing transparency is instead conducive to leading institutions diluting costs through scale effects and easing pressure from narrowing interest spreads. Quality: forward-looking indicators improved quarter-on-quarter, while asset quality divergence intensifies. Forward-looking indicators such as D1 first-payment overdue rate, D30 recovery rate, and D90 overdue rate have shown turning points. Under unified regulatory standards, companies whose asset quality recovers first will gain higher performance elasticity.
(2) In-depth interpretation of the new regulatory rules: from "formal compliance" to "substantive pricing anchoring." Regulatory scope connects seamlessly, closing arbitrage space. The "new comprehensive financing cost rules" cover not only small loan companies but also bring banks, consumer finance companies, and loan facilitators into a unified disclosure framework. Its core is to unify the calculation caliber of "comprehensive financing costs" across all types of lending entities and prevent institutions from regulatory arbitrage by changing license types or splitting fee structures. This means that regardless of the licensed entity, as long as it lends to end customers, it must follow the same set of cost display and pricing constraint standards. It forms a "combination punch" with the new loan facilitation rules, anchoring the long-term goal of declining interest rates. The new loan facilitation rules focus on "cleaning up gray models," eliminating implicit fees such as dual guarantee fees and membership fees to achieve pricing transparency; the small loan guidelines and the "new comprehensive financing cost rules," on the basis of transparency, further propose the long-term hard requirement of reducing rates to four times LPR. Together, they mark a new stage in which the consumer credit industry moves from "cracking down on violations" to "guiding reasonable pricing," setting a clear long-term interest rate ceiling for the industry. Compliance becomes core competitiveness, not merely a cost. Under the new rules, six consecutive months of compliance can lead to a regulatory rating upgrade, with priority access to tax reductions, inclusive finance relending support, and stable credit reporting permissions. Compliance capability directly translates into funding cost advantages and customer acquisition efficiency, and the Matthew effect among leading institutions will further strengthen.
(3) Evolution of industry landscape: customer group re-segmentation and accelerated market-based clearing. Competition for customer groups is intensifying, and the lower-tier market faces a major test of commercial sustainability. High-quality customer groups (interest rate range of 12%-18%) will become the focus of competition across the industry, and profit space may be further compressed. Under the hard constraint of "comprehensive financing costs," long-tail customer groups with high risk and high service costs will be forced to exit if they cannot break even within four times LPR. This forces institutions to rely on AI risk control and refined operations to expand the "profitable lower-tier boundary." Regulatory arbitrage disappears, and industry consolidation accelerates. Mid- and tail-tier small loan companies lacking technological capability and relying on high interest spreads will be cleared out faster (the number has already fallen from nearly 9,000 to 5,385). Leading institutions with abundant capital and advanced technology will expand share through M&A and entrusted management, significantly increasing industry concentration. Commercial banks: subject to dual regulation, with a judicial protection ceiling of 24%, but actual pricing mostly at 3%-8%. Regulation has halted price wars, and future focus will be on low-risk high-quality customer groups such as civil servants and central and state-owned enterprise employees, with basically no implicit fees or violent collection issues. Consumer finance companies: window guidance requires average pricing below 20%, with product ranges of 12%-24%. As a supplement to bank customer groups, they cover suboptimal to long-tail customers, have diversified risk pricing strategies, and are a key connecting layer. Small loan/internet small loan companies: subject to a 24% constraint in the short term, and long term (before the end of 2027) self-operated business needs to fall to four times LPR. Key cognitive correction: loan facilitation business is essentially technology services, with revenue derived from traffic and service fees, decoupled from loan interest rates, and not subject to the four-times-LPR limit. Its inclusive finance positioning remains unchanged and it is still an important supplement to banks and consumer finance companies. Leading institutions may experience short-term "volume decline" due to compliance adjustments, but in the long term they will benefit from market share concentration and improved earnings quality after industry clearing.
(4) Investment strategy: avoid fragile entities and focus on two types of "compliance winners." Focus on two types of targets: first, state-owned/industrial consumer finance companies with strong shareholder backgrounds and low funding costs: naturally suited to a low-interest-rate environment and possessing funding advantages that can traverse cycles. Second, leading credit technology platforms with outstanding fintech strength that have successfully transitioned to self-operated business, whose compliance safety cushion is thick and whose on-balance-sheet business impact from the "new comprehensive financing cost rules" is controllable. A positive cycle has already formed: good compliance record -> regulatory rating improvement -> access to low-cost funds and credit reporting support -> expansion of high-quality customer groups -> further consolidation of compliance advantages.
Leasing Industry View
Core view: it has the three excellent characteristics of "high interest spread, low non-performing ratio, and high dividend." The current investment value of the leasing industry (including financial leasing and financial leasing companies) is reflected in three core dimensions: high net interest margin (leading companies' net interest margin reaches about 4%), low non-performing ratio (the industry's overall non-performing ratio is stable at about 1%), and high dividend returns (the industry's average dividend yield exceeds 6%). These three advantages, combined with the industry's overall valuation at historically extremely low percentiles, make it a high-quality allocation direction with both defensive attributes and certain returns against the backdrop of intensifying financial market volatility and continued asset shortage. In terms of fundamentals: interest spreads remain high, and asset quality continues to improve. Specifically: (1) Net interest margin remains at a relatively high level. Although net interest margins in the financial industry are generally under pressure, leasing companies still have buffer space in net interest margin due to pricing resilience on the asset side and high rental yields brought by credit sinking. According to sample statistics from the China Financial Leasing Industry Development Report 2026, in the first three quarters of 2025, the average net interest margin of financial leasing enterprises was 3.43%, significantly better than the overall level of commercial banks; leading listed institutions have stronger profit resilience. (2) Asset quality improved steadily, and the non-performing ratio continued to decline. Asset quality indicators of financial leasing companies have recently shown marked improvement, with the proportion of non-performing finance lease assets declining. According to the industry development report released by the China Banking Association, as of the end of 2025, the industry-wide non-performing finance lease asset ratio was 0.91%, steadily declining year-on-year; leading institutions performed better in asset quality. As of the end of June 2026, Jiangsu Financial Leasing's non-performing finance lease asset ratio was 0.89%, maintaining a near-five-year low, with a provision coverage ratio of 397.6%, keeping risk compensation capacity ample. (3) High dividend attributes are prominent, constituting an important margin of safety, and listed leasing companies still show characteristics of high dividends and low valuation. In 2025, the dividend payout ratio of listed financial leasing companies remained at a relatively high level. In terms of policy and regulation, the industry is being rectified at the source, accelerating differentiation and concentration at the top. (1) Systematic reshaping of the regulatory framework: since 2025, regulatory policies have been introduced intensively, building a dynamic regulatory mechanism covering the full life cycle: the Measures for Regulatory Rating of Financial Leasing Companies (January 2025): reasonably adjusting rating factors, optimizing regulatory rating levels, improving rating processes, and strengthening the direct linkage between rating results and capital replenishment and business access. The Administrative Measures for Finance Lease Business of Financial Leasing Companies (issued on December 5, 2025, effective January 1, 2026): with 8 chapters and 68 articles, centered on the "full business process," covering due diligence, risk evaluation and approval, contract conclusion and execution, post-lease management, risk management and internal control, and other links, filling some institutional gaps at the micro-operational level of the financial leasing industry and marking a shift in regulatory logic toward penetrating management of micro-business operations. (2) Returning to the origin of "financing objects" and curbing "quasi-credit" business: the new rules emphasize that the primary prerequisite for compliance in finance lease business is compliance of the type of leased asset, strictly prohibiting non-equipment sale-and-leaseback and "low-value high-purchase," strengthening review of leased asset eligibility, and fundamentally closing arbitrage space for "high appraisal and high loan." The core policy goal is to push the industry from a "quasi-credit" model back to the origin of "financing + financing objects," better serving the real economy's equipment renewal and industrial upgrading needs. (3) Industry differentiation intensifies, and resources concentrate toward the top: in the short term, higher compliance costs and stock cleanup will bring industry pain, but in the long term they will push the industry from "scale expansion" to "quality improvement." Leading companies will further concentrate market share through professional capabilities and compliance advantages, while small and medium-sized companies need to seek survival space by deepening segmented fields.
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