Jiangsu Province has leading economic strength and strong support capabilities. Banks in the region are expected to benefit from the regional beta and their own development layout.

Zhongtai released a research report stating that Jiangsu Province leads the country in overall economic strength, with strong support from infrastructure and manufacturing industries, and a gradual decrease in dependence on exports to Europe and America. At the same time, the overall debt ratio of the province is manageable, accelerating debt restructuring and urban investment transformation, leading to continuous improvement in the overall structure of existing urban investment. In terms of regional development within the province, the transfer of industries has shown results, with rapid economic growth in northern Jiangsu and an increase in budget revenue covering urban investment debt. Bank of Jiangsu (600919.SH) and Bank of Nanjing (601099.SH) have outstanding performance, solid fundamentals, and are expected to benefit from regional beta and their own development layout, maintaining better performance than their peers. Considering the conversion of Nanjing convertible bonds into stocks, the core Tier 1 capital of both banks is expected to support at least four years of growth. Key points of Zhongtai's analysis are as follows: Economic Overview of Jiangsu Province: Leading in comprehensive strength, strong industrial support. Jiangsu Province leads in overall economic strength, with the second highest GDP total in the country and the fastest growth rate among the top ten provinces. Among the top six economic provinces, Jiangsu Province ranks in the top three in major economic indicators, with strong comprehensive strength and no apparent weaknesses. (1) Investment: Infrastructure leads investment growth, with infrastructure investment growing 8.6 percentage points above the national average; key manufacturing industries maintain high growth rates; real estate sales are gradually picking up. (2) Export: Strong exports of mechanical and electrical products, high-tech becoming a growth point, strong performance in "Belt and Road" and ASEAN imports and exports, gradual decrease in dependence on Europe and America. (3) Consumption: Growth in social retail is higher than in Zhejiang and Guangdong, with significant policy-driven consumption. Financial Aspect: Debt ratio is manageable, acceleration of debt conversion and urban investment transformation. (1) Urban investment interest-bearing debt is large, but the fiscal revenue coverage of the debt is acceptable. (2) Major economic provinces shoulder the burden: Ranked high in the allocation of annual debt quotas for 24 years, significant acceleration in infrastructure growth in the fourth quarter. (3) Existing urban investment: Since the beginning of 23 onwards, the platform exits in Jiangsu Province accounted for 75% of national exits, the maturity of existing debts has been extended, the face value interest rates have decreased, debt ratings and main body levels have been upgraded, and the overall structure of existing urban investment continues to improve. Industrial Aspect: Strong comprehensive strength in manufacturing, proactive layout of strategic emerging industry clusters. (1) Observing the manufacturing strength of Jiangsu Province from the perspective of the output of key products. Compared to 22 key manufacturing products in nine sample industrial provinces, Jiangsu ranks first in four items: ships, washing machines, electric motors in high-end equipment, and integrated circuits in semiconductors, and ranks in the top three in 15 items. (2) Proactive layout of strategic emerging industry clusters, leading in the number of national advanced manufacturing clusters, focusing on the construction of the "1650" industry system, and continuously building the "51010" strategic emerging industry clusters.Bank Of Nanjing, Bank Of Chengdu (601838.SH), Qilu Bank Co., Ltd. (601665.SH); Core asset: China Merchants Bank.Risk Warning: Economic downturn exceeded expectations; Financial regulation exceeded expectations; Research report information not updated in a timely manner; Policy implementation falling short of expectations.