The total market capitalization of the six major banks has increased from 6.64 trillion yuan at the end of last year to the current 8.79 trillion yuan, with a total increase of over 2 trillion yuan during this period. The total market capitalization of the ChiNext Index has also decreased from 11.39 trillion yuan at the end of last year to the current 8.67 trillion yuan.
As bank stocks continue to strengthen overall, this sector rightfully sits firmly on the "iron throne" of A-shares. Wind data shows that the bank sector has risen by over 28% this year, significantly outperforming other industries in terms of growth.
Today, A-share market has witnessed a milestone moment, with the total market capitalization of the six largest banks (Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank of China) reaching 8,792.309 billion yuan, surpassing the total market capitalization of all stocks on the ChiNext.
The broader market opened lower and moved lower today, with the Shenzhen Component Index and the ChiNext Price Index hitting new lows. At the close, the Shanghai Composite Index fell by 0.24%, the Shenzhen Component Index fell by 1.11%, and the ChiNext Price Index fell by 0.94%. In terms of sectors, bank stocks once again strengthened today, with the trillion-yuan banks like Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China hitting new highs.
According to data from Cailian News, among the six major state-owned banks mentioned, 3 of them have seen their stock prices rise by over 40% this year. Among them, Bank of Communications has seen the largest increase, with a cumulative rise of 46.92% in stock price this year. Even Postal Savings Bank of China, with the smallest increase among the six major banks, has also seen a cumulative increase of 25.44% this year.
The strong performance of bank stocks this year is closely related to their high dividend yields and the inflow of block orders. In terms of dividend yield, a research report released by China International Capital Corporation on August 20th pointed out that despite a significant increase in stock prices, the dividend yield of bank stocks remains around 5%, offering a premium of about 300 basis points compared to risk-free returns. The dividend yield of bank stocks is higher than that of traditional high-dividend industries such as electrical utilities and transportation, and more stable than industries like coal, making it relatively scarce in the market. Looking ahead to the next 3-6 months, the company believes that the price-to-book ratio of state-owned large banks at around 0.6x still has 15%-30% room for growth from the company's interim valuation target of 0.7x-0.8x, and the dividend yield of banks around 5% may decline to around 4%.
On the funding side, the intervention of the "National Team" including Central Huijin Investment Ltd. is one of the driving forces behind the rise of bank stocks. Since October 11, 2023, when the four major state-owned banks - ICBC, ABC, BOC, and CCB - collectively announced that they had obtained additional shares owned by Huijin, on April 12 this year, the four banks once again collectively disclosed the situation of additional shares held by Huijin, with the four major banks obtaining a total of 1.089 billion A-shares. In addition, frequent increases in funds in broad-based indices such as the CSI 300 and SSE 50 have also benefited the banking sector to a certain extent.
In stark contrast to the performance of bank stocks, the ChiNext Index has not been satisfactory. The ChiNext Index has declined by 19.07% year-to-date, and the total market capitalization has shrunk from 11.39 trillion yuan at the end of last year to the current 8.67 trillion yuan, already surpassed by the total market capitalization of the six major banks.
Looking at the top ten market capitalization stocks on the ChiNext, there are currently only 8 companies with a total market capitalization of over 100 billion yuan. The largest market capitalization is still held by Contemporary Amperex Technology, with a current total market capitalization of 807.181 billion yuan. The second-ranked Mindray Medical has a total market capitalization of 285.724 billion yuan, a difference of more than 500 billion yuan from the first-ranked Contemporary Amperex Technology. In addition, the former "eye care leader" Aier Eye Hospital Group has fallen below the 100 billion yuan market capitalization threshold, with a current market capitalization of only 85.156 billion yuan.
