Zhongtai Securities Research Report: Continues to Be Bullish on Banking Stocks' Stability

Q1 Capital Flows: Passive Funds and Northbound Capital Exit Banking Sector

36Kr has learned that Zhongtai Securities recently published a research report on the banking sector, providing a detailed analysis of capital flows into banking stocks during Q1 2025. The report noted that both passive funds and northbound capital experienced outflows from the banking sector during the first quarter, while active funds recorded modest inflows.

This capital movement has drawn widespread market attention to the banking sector's future trajectory. Zhongtai Securities stated clearly in the report that despite short-term capital outflow pressures, from a medium- to long-term perspective, it remains bullish on the stability and sustainability of banking stocks.

High Dividend Logic: A 'Ballast' in Subdued Markets

Zhongtai Securities' analysis suggests that during periods of overall market sluggishness, banking stocks will continue to be attractive thanks to their high-dividend characteristics. For investors seeking stable returns, bank stocks' dividend payouts stand out particularly in a low-interest-rate environment, serving as a "ballast" in asset allocation.

With the current macroeconomic recovery proceeding at a moderate pace and market risk appetite yet to rebound significantly, the defensive value of high-dividend strategies has become even more prominent. The banking sector's overall valuation remains at historically low levels with a clear dividend yield advantage, providing long-term capital with a favorable allocation window.

Two Investment Themes: Regional Advantages and High-Dividend Stability

Zhongtai Securities outlined two core investment themes for banking stocks in its report:

Theme One: City and rural commercial banks with strong regional advantages and high earnings certainty. The report specifically highlighted city and rural commercial banks in economically active regions such as Jiangsu, Shanghai, Chengdu-Chongqing, Shandong, and Fujian, noting their strong performance certainty thanks to deep local market penetration. Key recommended names include Bank of Jiangsu and Bank of Hangzhou, among other regional banks.

Theme Two: Large banks supported by the high-dividend stability thesis. The report recommends the six major state-owned banks, as well as joint-stock banks including China Merchants Bank, Industrial Bank, and CITIC Bank. These banks offer scale advantages and stable dividend policies, making them suitable for investors who prefer steady returns.

Outlook: Banking Sector Allocation Value Remains Intact

Overall, despite some capital outflows during Q1, the banking sector's fundamental support has not been shaken. Against the backdrop of continued "stable growth" policy implementation, banks' asset quality is expected to remain steady, and net interest margin pressures are gradually easing. Zhongtai Securities' report sends a clear signal: the investment value of banking stocks remains noteworthy, and their stability attributes may continue to attract capital, especially in an environment of heightened market volatility.