Zhongtai Securities: The current financial stocks are in a valuation depression+a mismatch period with stable fundamentals

The Zhitong Finance App learned that Zhongtai Securities released a research report saying that the overall investment logic of the financial sector is: first, the regulatory policy is centered on cultivating medium- to long-term slow bulls in the market, and the financial sector is given the core function of stabilizing the market; second, the overall return of financial stocks under K-type differentiation is strong; third, the pressure to reduce holdings in the early period was basically released. Currently, the valuation of financial stocks is a mismatch period with stable fundamentals. Banks: Interest spreads have bottomed out, performance is resilient, and pressure to reduce holdings has basically been released. Insurance: The performance of listed insurers improved markedly in the first half of 2026, and insurers with high equity positions benefited from the science and technology innovation market, leading to an increase in investment income. Brokerage: Market transactions and the expansion of the two financing scales supported the growth of brokerage business, and the industry's performance increased in the first half of 2026.

The main views of Zhongtai Securities are as follows:

The overall investment logic of the financial sector: 1. Policy environment and sector positioning: The regulatory policy is centered on cultivating medium- to long-term slow bulls in the market. The policy strength is continuous. The market relies on the financial sector to hedge against fluctuations in the growth sector and calm index fluctuations. Financial assets with undervalued and outstanding profit certainty ushered in a phase of capital repricing. 2. Under K-type differentiation, the overall benefits of the financial sector: The current economy is characterized by K-type differentiation, strong supply and demand. The policy strength of the July Politburo meeting is strong, and this trend will continue for a long time; the performance of the production side, technology, and exports is strong, and the performance of traditional consumption, real estate and other fields is weak. The financial sector as a whole benefits from this macroenvironment. 3. Release of pressure to reduce holdings and valuation cost performance: The reduction in long-term capital holdings of financial stocks in the early period caused sector valuations to be low, resulting in a mismatch between valuation and performance. Currently, the cost performance ratio of allocation is outstanding; as demand for stable market stability increases, the market will gradually pay attention to the steady fundamentals and undervaluation characteristics of financial stocks.

Banking sector fundamentals and allocation logic: Listed banks' profits are resilient, net interest spreads have limited downward restrictions, and revenue has maintained positive growth; asset quality shows structural differentiation, improving the quality of public assets to hedge against poor upward pressure on retail, the sector's own profits can fully absorb credit impairment, and risk mitigation capacity is sufficient. Pressure to reduce holdings of state-owned funds such as chip-side securities and remittance funds has basically been released, and insurance capital continues to increase. The configuration is divided into two main lines: large state-owned banks with high dividends and regional urban commercial banks with high operating returns.

Insurance sector repair logic: The performance of listed insurers improved markedly in the first half of 2026, with high-equity position insurers benefiting from the science and innovation market leading to increased investment income; improvements in sector performance clearly diverged from stock price trends. The core factors of suppression were concentrated capital allocation on the technology circuit and early reduction in holdings. Insurers continue to lay out science and innovation assets, and improvements on the investment side are continuous. They can allocate high-equity flexible insurers, comprehensive insurance leaders, and financial insurance leaders.

The market situation and growth logic of the brokerage sector: market transactions and the expansion of the two financing scales supported brokerage business growth, and industry performance increased in the first half of 2026; the listing of science and innovation companies accelerated, leading brokerage firms relied on investment banks, direct investment, and follow-up investment to form long-term increases, and overseas business expansion fluctuated smoothly in the cycle. Brokerage firms target the financial sector in an aggressive manner. They have both short-term valuation repair and long-term growth logic for science and innovation, giving priority to leading brokerage firms.

Banking sector investment suggestions: 1. Deterministic bank performance for the whole year will bring steady returns from bank stocks in 2026, which is related to the short-term market style; the economic development model will continue (strong policy strength), strong public business and residents' continued low risk appetite will drive interest spreads to bottom up, revenue growth will continue to be a highlight, and performance certainty is strong. 2. Bank stocks have two main investment lines: the first is an urban agricultural commercial bank with regional advantages and strong certainty. Regions include Jiangsu, Shanghai, Chengyu, Shandong, and Fujian. Second, the logic of high dividends is steady, and the focus is on recommending large banks.

Non-banking investment advice: continue to be optimistic about the investment value of brokerage and insurance sectors. Previously, the reduction of some large capital holdings caused sector valuations to be low. As capital holdings are gradually cleared and market capital rebalance options are selected, the market and policies will focus on stabilizing the value of financial stocks in the general market, and errors in performance and valuation are expected to be rebalanced. The brokerage sector is currently in the “high fundamentals and historically low valuation” allocation window. The “technology content” of brokerage firms is high, science and innovation follow-up business reserves are sufficient, providing support for future profit flexibility, and there is plenty of room for valuation repair. It is recommended to continue to focus on allocation opportunities under the sector's high fundamentals and low valuations.

Risk warning: Macroeconomic recovery falls short of expectations, real estate and CITI credit risk exceeds expectations, market turnover continues to shrink, sharp fluctuations in the equity market suppress insurance and brokerage performance, and changes in industry regulatory policies.