Huatai Securities issued an article stating that the October 12 financial conference sent a positive signal in the direction of strengthening support for debt, stabilizing real estate prices, and promoting capital increases for major banks, etc., forming a synergy with a series of monetary policies and capital market policies since the end of September. The strength and effects of subsequent policies are worth looking forward to. This report focuses on the three core incremental analysis paths of this conference's impact on banks. Referring to the experiences of several historical debt cycles, major bank capital increase cycles, and fiscal expansion cycles, policy incentives have a strong driving effect on bank expansion and valuation repair. Currently, bank valuations are only 0.64x, or it is expected that a 20%-25% recovery space will reach about 0.80x. Looking at the individual stock level, small and medium banks have shown greater flexibility. Therefore, we believe that this round of policy combinations may have stronger catalytic effects on stock banks that were suppressed by pessimistic expectations of asset quality and regional banks with excellent quality to grasp valuation repair+high-quality targets. Furthermore, steady dividend targets may still have better allocation value.

Huatai Securities issued an article stating that the October 12 financial conference sent a positive signal in the direction of strengthening support for debt, stabilizing real estate prices, and promoting capital increases for major banks, etc., forming a synergy with a series of monetary policies and capital market policies since the end of September. The strength and effects of subsequent policies are worth looking forward to. This report focuses on the three core incremental analysis paths of this conference's impact on banks. Referring to the experiences of several historical debt cycles, major bank capital increase cycles, and fiscal expansion cycles, policy incentives have a strong driving effect on bank expansion and valuation repair. Currently, bank valuations are only 0.64x, or it is expected that a 20%-25% recovery space will reach about 0.80x. Looking at the individual stock level, small and medium banks have shown greater flexibility. Therefore, we believe that this round of policy combinations may have stronger catalytic effects on stock banks that were suppressed by pessimistic expectations of asset quality and regional banks with excellent quality to grasp valuation repair+high-quality targets. Furthermore, steady dividend targets may still have better allocation value.