Since July’s style rotation the Chinese bank sector has rebounded, delivering
positive absolute and relative returns. Public mutual fund holdings rose 0.92
percentage points to 1.93%, the highest since 3Q2025. CITIC Securities cites a
convergence of style rotation, improved liquidity/flow conditions and stability
operating expectations. Near term the sector may see increased from volatility
flows; mid term it should be driven by fundamentals and allocation demand. CITIC
expects the sector to be re‑rated from a high‑dividend defensive asset to a
high‑certainty equity and forecasts upward valuation pressure through the year.
