On July 5th, Guo Lianhui reported that the stock prices of Hong Kong-based banks outperformed the Hang Seng Index in the second quarter, indicating that the tail risk of the industry has decreased and supporting the average return of shares, but not the revaluation of stocks. The bank said that concerns about tail risks in mainland commercial real estate are declining, and there are also positive surprises in the returns of some individual bank shareholders. However, although local bank stocks are undervalued, based on pre-provision operating profit growth and credit cost factors, performance surprises in the first half of this year are expected to be limited, and the performance of local bank stocks in the second half of the year is expected to be roughly similar to that of the Hang Seng Index. Morgan Stanley expects Bank of China Hong Kong (2388.HK) and Tai Sang Bank (2356.HK) to outperform their peers in the first half of the year.