According to the Guoxin Securities Research Report, the current fundamentals of banks are still under pressure, and marginal changes are not significant. Looking at performance throughout the year, it may be close to the quarterly report. Looking at the key drivers: (1) Affected by the decline in LPR in February, banks' net interest spreads are still under downward pressure, but as the base decreases, if subsequent LPR does not drop sharply, the annual net interest spread will adversely affect or weaken on revenue and net profit growth, and banking performance is expected to bottom out. (2) As the macroeconomy recovers, the rate of bad generation is expected to remain stable throughout the year. Banks are currently at a high level of provision coverage and loan ratio, and they are still able to feed back profits through provisions. The net profit growth rate is expected to remain stable. (3) As the base is reduced and policy orientations are fine-tuned, the asset growth rate may remain at a relatively stable level. Currently, the banking sector's valuation is low. After experiencing real estate risk exposure and stock mortgage interest rate adjustments, the sector's potential shortfall has decreased markedly, which means that there is very little downside risk in valuation. If LPR does not drop sharply in the future, then for most listed banks, the results for the first quarter of 2024 may be the bottom area of recent years. In the future, as macroeconomic recovery improves, it is expected to drive valuation repair in the banking sector, thus maintaining the industry's “overrated” rating.