CITIC Securities: It is highly likely that bank valuations will recover to over 1 times net assets.

CITIC Securities stated that recently, on one hand, insurance institutions continue to actively increase their holdings in banks, while on the other hand, the relative returns of the banking sector have weakened. Investors are closely watching the future trends of bank stocks. From a medium-term perspective, the banking sector is still undergoing a process of reevaluating net assets. Coupled with the stratified logic or long-term deducing of the stock market, the value of bank stocks for institutional investors is expected to continue to increase. Long-term capital allocation is still in a situation of under-allocation, and it is expected that absolute value will continue to be deduced in the future. CITIC Securities believes that it is a high probability event for the valuation of banks to be restored to above 1 times net assets. If the characteristics of the bull market are strengthened, the subsequent sector rotation effect will also catalyze the continuation of the bank stock market. Therefore, it is recommended that investors maintain an actively allocate strategy.