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China Fund News reporter Anman

Another day to witness history!

In the morning of July 23, the market opened low and then fluctuated downward. On the market, high-dividend assets rebounded again after yesterday's big divergence. Industrial and Commercial Bank of China, Bank of China, Bank of Communications and Yangtze Power all hit new historical highs.

Friends who chased CITIC Securities at the end of yesterday's trading have suffered losses since the opening. As of midday close, CITIC Securities still fell nearly 3%. In addition, the semiconductor industry chain, which has been strong recently, has retreated sharply.

As of midday, the Shanghai Composite Index fell 0.59% to 2946.63 points, the Shenzhen Component Index fell 1.59%, and the ChiNext Index fell 1.55%. The A-share half-day turnover was 382.44 billion yuan, which was significantly narrowed from the previous month.

Industrial and Commercial Bank of China, Bank of China, Bank of Communications

Record high

On the morning of July 23, A-share bank stocks rebounded strongly, with Industrial and Commercial Bank of China, Bank of China and Bank of Communications hitting new historical highs. As of now, Industrial and Commercial Bank of China has risen 33% this year, Bank of China has risen 26% this year, and Bank of Communications has risen nearly 40% this year.

Among them, ICBC’s stock price has set new records for 10 trading days in the past month, while Bank of Communications’ stock price has set new records for 12 trading days in the past month.

On the news front, some media reported that after the interest rate marketization reform, the linkage between deposit and loan interest rates has been strengthened, and large state-owned banks are considering lowering the deposit listing interest rate. Industry insiders mentioned that the effectiveness of the deposit interest rate marketization adjustment mechanism is still being released, and it is expected that banks will reasonably adjust the deposit interest rate level according to market interest rate changes, which is also conducive to the stability of net interest margin.

In addition, Qilu Bank had the largest increase, rising by more than 6% during the session.

Qilu Bank announced after the market yesterday that it achieved operating income of 6.412 billion yuan in the first half of 2024, a year-on-year increase of 5.53%; net profit attributable to shareholders of listed companies was 2.347 billion yuan, a year-on-year increase of 16.98%. As of the end of the first half of 2024, the bank's total assets were 647.544 billion yuan, an increase of 42.728 billion yuan from the beginning of the year, an increase of 7.06%.

In the past two years, the capital market has fluctuated frequently, and the attractiveness of bank stocks has begun to emerge. Since last year, the share prices of many bank stocks have risen by more than 50%, and the dividends have been stable for a long time, especially the dividend yields of Agricultural Bank of China and Industrial and Commercial Bank of China have exceeded 7%.

Ma Kunpeng, chief analyst of the banking industry at CICC, pointed out in a research report recently released that looking back on the first half of the year, the high dividend strategy performed strongly, and under the catalysis of the capital side, the absolute and relative returns of the banking sector were obvious.

Ma Kunpeng said that under the background of weak macroeconomic recovery and shortage of A-share assets, banks, as representatives of dividend assets, have gained favor from low-risk preference funds with lower valuations, higher dividend rates, and more certain dividends. The increase in holdings by the national team, the expansion of ETFs, the allocation of insurance funds to OCI accounts, and the return of some northbound funds have boosted the rise of the banking sector.

Shenyin Wanguo said that whether it is the capital-driven under the dividend low-volatility strategy or the fundamental changes with stable profits and expected marginal improvement, the banking sector will reap relatively considerable absolute and relative returns throughout the year, and it is possible to actively allocate at this point in time. Economic data is still in the bottoming period, and the policy catalysis and consolidation of the upward attitude of the economy are clear. On the basis of asset quality and safety, looking for high-quality high-dividend stocks from low valuations may be the main market style in the third quarter. At the same time, focus on oversold joint-stock banks with expected bottom-up improvement in the profit and loss statements and better chip structures.

6 minutes straight line limit

Near the midday closing, the high-speed rail sector moved unusually, and China Railway High-speed rose straight to the daily limit in 6 minutes.

Wind High-speed Rail Index also rose sharply. Tongye Technology rose by more than 10%, Shentong Metro hit the daily limit, Jiaoda Sino and Dinghan Technology followed suit.

On the news front, the explanation of the "Decision of the CPC Central Committee on Further Comprehensively Deepening Reforms and Promoting Chinese-style Modernization" mentioned railway system reform in many places, including "promoting the independent operation of natural monopoly links and market-oriented reform of competitive links in industries such as energy, railways, telecommunications, water conservancy, and public utilities, and improving the regulatory system and mechanism", "promoting price reform in water, energy, transportation and other fields", "deepening the reform of the comprehensive transportation system, promoting railway system reform, developing general aviation and low-altitude economy, and promoting the optimization of toll road policies".

CITIC Securities mentioned in its latest research report that the net profit margin of China Railway Group will be only 0.27% in 2023, and my country's railway operations have long been weak. Under the background of top-level design, it is expected that the reform of the railway system will be accelerated, and the market-oriented reform of competitive links will improve the profitability of operating companies.

CITIC Securities believes that "market-oriented reform of competitive links" may be reflected in the liberalization of competitive businesses, the promotion of diversification and moderate competition of market players in railway transportation business, in addition to the public welfare role, mainly focusing on high-speed rail passenger transport and railway freight. For example, railway freight is accelerating its transformation to a modern logistics supply chain, and deeply integrating with social capital and operating entities to promote high-quality development. At the same time, the marketization level of the price system of high-speed rail passenger transport and railway freight continues to improve. By developing multimodal transport, effectively improving service experience and using price means, improving the level of water-rail and road-rail transport, and reducing the overall social logistics cost, the bottleneck of social capital investment in railways is also expected to be lifted.

Editor: Captain

Review: Chen Mo

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