China Securities Co., Ltd: This round of deposits moving towards standardized capital market tools, residents' wealth allocation moving towards diversified investment portfolios.

China Securities Co., Ltd. released a research report stating that the logic behind the relocation of deposits is that the new regulations on asset management have broken the "fixed redemption" model. In the macroeconomic background of the trending decline in risk-free returns, the asset allocation mode of residents is undergoing reshaping. On one hand, the traditional bank wealth management model of "capital preservation and interest guarantee" is gradually being broken by net asset value management. The returns of wealth management products are truly linked to risks, and volatility will become the norm. On the other hand, the continuously decreasing deposit interest rates are reducing the attractiveness of savings. Even if most funds flow back to lower-yield deposit-like assets, they will seek higher returns by seeking more liquidity, indirectly or directly increasing allocations to the stock market, bond market, or other asset management products. The conversion of non-standard to standard assets is driving residents' wealth allocation from heavily-weighted fixed redemption assets to diversified investment portfolios, which is also a trend in the deepening development of the financial market. The main points of China Securities Co., Ltd. are as follows: The new regulations on asset management are driving the logic of wealth management for residents from "reliance on fixed redemption" to "risk-return matching". Before the new regulations, investors displayed binary behaviors: on one hand, they pursued absolute capital preservation and viewed high-yielding non-standard products as alternatives to deposits, while on the other hand, they actively took on risks to seek excess returns. With the breakage of fixed redemption and the comprehensive net asset valuation, the original implicit guarantee expectations gradually changed. At the same time, the conversion of non-standard to standard assets has compressed the premium space dependent on opaque information acquisition. Investors now need to accept the principle of "seller responsibility, buyer accountability", where any returns correspond to corresponding risks, gradually breaking the illusion of "high returns, low risks", and entering a new stage of risk and return equality in the asset management market. The current relocation of deposits by residents is a gradual shift from non-standard asset allocation to standard capital market tools based on real risk tolerance. Amid a backdrop of declining real interest rates, scarcity of high-quality assets, and increased market volatility, residents are moving their deposits to deal with the decline in fixed deposit returns, which is a passive defensive behavior under limited choices. This is different from the past strategy of having high-yielding, low-risk assets as a base, actively seeking out "lottery-like returns" assets. With no systemic increase in risk preferences, the funds that are truly moving are mainly flowing towards wealth management products, money market funds, dividend insurance, and other assets with similar risk attributes to deposits. This type of funds are more involved in the market indirectly through asset management products, rather than directly entering the stock market. Facing the trend of migration of funds with low risk preferences, various financial institutions are building differentiated acceptance systems based on their own endowments. Bank wealth management is meeting the core demand for stable returns through the "fixed income +" strategy and flexible term products, gradually increasing the supply of medium-to-high volatility strategies. Public funds and distribution institutions are focusing on transforming from "selling side" to "buy side advisory", guiding long-term rational investments with comprehensive product matrices and account accompanying services. Insurance institutions are focusing on developing products with floating returns such as dividend insurance and increasing lifelong savings, building a revenue structure of "long-term bond as ballast, high stock dividend as enhancement". Private equity institutions need to adhere to reasonable management scale, focusing on creating sustainable Alpha through deep research and strategic iteration. This process is driving the entire industry from homogeneous product sales to a new paradigm centered around customers' real risk preferences, emphasizing "risk-return matching" and "comprehensive wealth companionship". Risk analysis: market price uncertainty, uncertainty in enterprise profit forecasts, technological updates and iterations.