First of all, the inflection point of asset quality is coming.

In 2020, due to the epidemic situation, low interest rates and loose liquidity, banks are profitable and the market is worried about non-performing loans of banks. In the context of the market surge in 2020, the banking sector fell 3.48% against the market. With the economic recovery, the market's worries about the quality of bank assets have been greatly alleviated, and the inflection point of bank non-performing loan ratio is expected to come in the first quarter of 20021. Before the big cycle inflection point comes, the probability of continuous improvement of asset quality is greater.

Second, the demand for bank loans increased, the interest margin rebounded and the profitability increased.

Judging from the bank credit data of 2002 1 and1and February, there are cases of rising supply and demand and rising interest margin. The medium and long-term loans of entity enterprises have risen sharply, and the industries of loan enterprises are evenly distributed, which shows the sustainability of economic recovery. Short-term loans (mortgage loans and consumer loans) to the residential sector have declined, and the monopoly position of real estate credit has been changed. With the above credit characteristics, the operating conditions of enterprises are improving and the profitability of banks is increasing.

Third, the low share price of banks has become a safe haven for some funds.

Most of the bank's shares are in a state of breaking the net, and the stock price is low. After the Spring Festival, the market has been adjusted. The capital flowing out of the high-valued sector flows to the profit inflection point and the low-valued banking sector. The hedging effect is also a major reason for the recent surge in bank stocks. After the market stabilizes, some funds may flow to other fully adjusted sectors, and the rise of bank stocks may be a process of gradually raising the bottom.

To sum up, the recent surge in bank stocks mainly benefited from the economic recovery environment, the pro-cyclical sector boom, the arrival of the inflection point of bank asset quality and the improvement of profitability. As the economy returns to normal, the valuation of banking stocks has room for repair. The funds flowing in because of hedging may flow out of the banking sector at the end of market adjustment. From this perspective, it is unlikely that bank stocks will continue to rise.