中国金融业：全球不确定环境中的稳定赢家

Richard Xu, CFAEquity AnalystRichard.Xu@morganstanley.com Steady outperformer amidglobal uncertainty Chiyao HuangEquity AnalystChiyao.Huang@morganstanley.com Beryl YangResearch AssociateBeryl.Yang@morganstanley.com We believe the de-risking efforts in China has prepare China'sfinancial system well for potential global uncertainty, and thepositive development loop in China's financial system, shouldsupport healthy share performance that is less correlated toglobal markets. China Financials Asia PacificIndustry View Recent data continue to support our view that China's financial system will getback to a positive development loop despite global uncertainties.Continuedmoderation in PPI pressure, decent consumption data during Chinese New Year(CNY), and higher-than-expected growth in China exports were achieved despitefurther rationalization in loan growth, stabilizing loan yield and reasonable fiscalsupport. This has further improved our confidence in a positive development loopthat will result in stabilization and an eventual rebound in various financial yieldsand bank NIM. We expect stabilizing ROE and a modest recovery in profit anddividend growth to follow, despite the global uncertainty. In addition, a much morestable financial system following years of risk digestion and still fiscal room tocushion potentially softer credit demand should support earnings resiliency even ifgeopolitical volatility rises further. More certain upward trend and better entry point after 'national team' sellingmake China financials an attractive investment with less correlation with globalmarkets.Fundamentally, our Asian economists and China strategists view China asbeing less exposed to the current oil price disruption than most other regionalmarkets that have outperformed more recently, e.g., Japan, S. Korea and Taiwan. Wealso believe the performance of China financials will be more influenced by theirown fundamentals, which we believe are gradually getting back into an upwardtrend, and by China domestic fund flows. While these flows in the past six monthshave impacted financials adversely, led by national team selling of ETFs andindividual stocks, we believe this selling is two-thirds done, and that the sovereignplayers have replenished their ammunition with which to stabilize the market andbuy more ETFs in times of rising volatility. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. Insurance names are attractive high-growth names; major banks are steadyperformers.We continue to believe valuation for quality insurance names such asPing An (2318.HK) and China Life (2628.HK), as well as high-growth banks such asBank of Ningbo (002142.SZ), will get back to ~1.5x P/B over time with lower-risk andhigher-quality development models in China. We also see bank dividends asattractive at ~5.5%, with banks such as China Construction Bank (0939.HK) andIndustrial Bank (601166.SS) outperforming as we go into dividend season in June andJuly. We see 1Q26 earnings, upcoming dividends and reduced national team sellingas key catalysts.We also believe selected brokers present a compelling tacticalbuying opportunity once nearterm uncertainty subsides. For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Recent data and policies support our view of a positive loopforming in the financial system despite global uncertainties Credit risks from manufacturing capacity issues continue to show signs of improvement:The major signpost we are watching is the gap between nominalmanufacturing output growth and capex growth, which has reversed from a positive gapof 5.5% at the end of 2024 to a negative gap of 3.8% at the end of 2025. Multiple anti-involution efforts and a notable slowdown in manufacturing mid-to-long-term loan growth(to 6.6% by end of 2025) have sent manufacturing capex to 0.6% by 2025 year end, vs.9.2% in 2024. This suggests new risk formation in the sector should be slowing downmaterially. Recent datapoints from PPI and export are evidence of the improvement and resilienceof China's supply chains:PPI sequential growth turned positive since Aug-2025 with theYoY decline narrowed to -0.9% as of Feb 2026 from the trough of -3.6% YoY in mid-2025.Export growth soared to 21.8% in Jan-Feb 2026, which we view a sign of China's industrialupgrade progress, despite seasonal factors also in play. We