Source: Brokerage China
Author: Shi Qian

In today's morning session,$SSE 50 Index (000016.SH)$Suddenly surged more than 2%. It is particularly worth mentioning that,$Kweichow Moutai (600519.SH)$Surged more than 5%, leading this Index. Moreover, against the backdrop of the significant rise of Kweichow Moutai,$Wuliangye Yibin (000858.SZ)$、$Shanxi Xinghuacun Fen Wine Factory (600809.SH)$、$Luzhou Laojiao (000568.SZ)$Also followed by a strong outbreak.

Meanwhile, the large financial stocks in Hong Kong continue to soar,$NCI (01336.HK)$Increased by over 10%, $CGS (06881.HK)$ rising over 8%, $CHINA LIFE (02628.HK)$、 $CICC (03908.HK)$ Increased by over 7%, $HTSC (06886.HK)$ 、 $SWHY (06806.HK)$ An increase of more than 6%,$PING AN (02318.HK)$、 $CITIC SEC (06030.HK)$ Increased by over 5%.

Hong Kong stocks of China Mainland Banking continue to rise.$ABC (01288.HK)$At one point, it rose over 2%, and the stock price continued to hit a historical high. $CM BANK (03968.HK)$ Increased by over 4%, $CCB (00939.HK)$ 、 $ICBC (01398.HK)$ Up over 2%.

Analysts believe that today's significant market rise is closely related to three bullish factors:

First, the State Council Information Office will hold a press conference at 3 PM on March 17, 2025 (Monday), inviting Li Chunlin, Deputy Director of the National Development and Reform Commission, along with relevant officials from the Ministry of Finance, the Ministry of Human Resources and Social Security, the Ministry of Commerce, the People's Bank of China, and the State Administration for Market Regulation to introduce measures to boost consumer spending and answer journalists' questions.

Second, according to news from the People's Bank of China on March 13, an expansion meeting clarified the implementation of a moderately loose monetary policy. Based on domestic and international economic financial situations and the running of the financial market, appropriate times for reducing the reserve requirement ratio and interest rates will be selected.

Third, just now, the head of a relevant department at the Financial Supervision Administration answered questions regarding the development of consumer finance to assist in boosting consumption. The Financial Supervision Administration issued a notice requiring financial institutions to develop consumer finance to aid in boosting consumption. The relevant official indicated that the management of consumer finance will be optimized and encouraged banking financial institutions to increase personal consumer loan disbursements under controllable risk conditions, reasonably set loan amounts, terms, and interest rates, and optimize resource allocation. The requirements for due diligence and liability exemption for personal consumer loans will be improved. Under effectively verified identity and controllable risk conditions, explorations will be made to develop online credit card opening and activation services.

Collective surge.

The early session of A-shares was uplifting, with Kweichow Moutai suddenly surging over 5%, a rare magnitude of increase recently. Consumer stocks also followed suit with significant rises.

In fact, from the investment clues, the consumer sector in the Hong Kong stock market has been stirring recently.

The State Council Information Office will hold a press conference on March 17, 2025 (Monday) at 3 PM, inviting Li Chunlin, Deputy Director of the National Development and Reform Commission, along with relevant officials from the Ministry of Finance, Ministry of Human Resources and Social Security, Ministry of Commerce, People's Bank of China, and the State Administration for Market Regulation to discuss the situation regarding boosting consumption and answer reporters' questions. This news undoubtedly brings significant emotional uplift to the market.

Under the leadership of Kweichow Moutai, the SSE 50 rose over 2%, and the A50 also surged over 2%,$Cinda (601059.SH)$with China Galaxy hitting the daily limit, financial stocks like CM BANK and Industrial Bank also followed suit.$SSE Composite Index (000001.SH)$Gaining over 1% to recover the 3400 point mark, reaching a new high for the year. The performance of A-shares was also significantly stronger than that of H-shares.

In terms of news, the People's Bank of China stated on its website that on March 13, the expanded meeting of the People's Bank of China clarified that a moderately loose monetary policy should be effectively implemented. According to the domestic and international economic and financial situation and the operation of the financial market, there will be an appropriate timing for reducing the reserve requirement ratio and interest rates, and comprehensively using various monetary policy tools like open market operations to maintain ample liquidity, ensuring that the growth of social financing scale and money supply aligns with economic growth and the expected targets for overall price levels.

A major brokerage firm stated that although the financing balance continues to rise, potential still exists. Furthermore, a notable difference from previous years is that there are signs of old money returning after 10 years, and capital that previously flowed out to trade US stocks has also started to return. If the Volume can be maintained and the logic continues to be verified, a bull market in A-shares can still be anticipated.

The National Financial Supervision and Administration Bureau has recently released.

Just now, the Financial Supervision Bureau issued a notice requiring Financial Institutions to develop consumer finance to help boost consumption.

The main content of financial support for boosting consumption includes four parts:

First, increase the supply of consumer finance. Financial Institutions should focus on expanding commodity consumption, developing service consumption, and cultivating new types of consumption, enriching and improving financial products and services. Tailor financial products for new consumption scenarios such as digital, green, and Asia Vets to better meet personalized and diversified financial needs, continuously strengthen digital empowerment, and enhance the adaptability and convenience of consumer finance services. Increase credit allocation to wholesale and retail, Lodging, Dining, cultural tourism, Education, and Retirement sectors to support the healthy development of consumer supply entities.

Second, optimize consumer finance management. Encourage Banks to increase personal consumer loan issuance while keeping risks controllable, reasonably set loan limits, duration, and interest rates, and optimize resource allocation. Improve due diligence exemption requirements for personal consumer loans. Explore the possibility of online account opening and activation of credit card services under the premise of effective identity verification and risk management.

Third, carry out personal consumer loan relief. Banking Financial Institutions may reasonably agree on the repayment period and frequency for borrowers who are temporarily in difficulty, based on borrowers' credit records and repayment guarantees. Provide renewal loan support for qualifying borrowers based on their applications and after passing the review.

Fourth, optimize the consumer finance environment. Banking Financial Institutions should standardize the terms of consumer loan contracts, clearly indicating the final comprehensive financing costs. Utilize financial product inquiry platforms and financial consumer protection service platforms to facilitate consumer inquiries and usage. Promote payment convenience in consumption scenarios to meet the payment service needs of groups such as elderly people and foreign visitors to China. Improve the diversified resolution mechanism for financial consumer disputes to appropriately resolve consumer finance disputes. Strengthen the joint punishment and crackdown on behaviors that disrupt market order and infringe on financial consumer rights.

The profit effect is beginning to show.

As of March 13, more than 2,200 stocks in the entire A-share market are in a bullish distribution, while only 1,184 stocks have risen more than 20% from January 27 to March 12.

This indicates that the whole market is still in a balanced operation phase and has not overheated. During this stage, the sector rotation shows a positive pattern; even the consumer sector, which had very low expectations, has recently displayed a bullish pattern. The profit-making effect is becoming apparent.

Industrial Bank stated that market confidence is boosted along with long-term capital entering the market, providing allocation opportunities for high-quality leading companies in A-shares: policies continuously stimulate domestic demand consumption, boosting market confidence. Commodity consumption and service consumption are expected to become significant driving forces for consumption growth; 300 billion yuan will soon be released, providing strong support for domestic consumption. Furthermore, the 2025 government work report aims to boost market confidence: it involves multiple fields including capital markets, private economy, and real estate.

KYY Securities further stated that there are three major domestic deepening mirrors: ① from low inflation to moderate inflation; ② from low economic expectations (continuous profit downgrades) to economic outperformance; ③ from extreme style (concentrated opportunities) to diversified style (rich opportunities). There is a firm policy confidence with a lowered slope expectation; the focus of fiscal policy is on 'expanding domestic demand'; while on the monetary front, 'broad credit' takes precedence over 'broad money'.

KYY Securities indicated that A-shares have entered the second phase of a bull market. A major feature of the previous market was that policy games exceeded fundamental games. The aim of the policy game is to determine the 'profit bottom,' but the elasticity of the profit cycle is becoming increasingly weak; even when the 'profit bottom' arrives, the overall elasticity cannot be compared to the past. Insufficient profit elasticity combined with the earlier strong expectation for policy games leads to diminishing returns on further policy cost-performance games. Now should focus on exploring fundamental expectation differences: finding fundamental expectation gaps from the perspective of ROE, paying attention to 'asset turnover (income dimension)' and 'sales profit margin (cost dimension)'.

Editor/Rocky