Zhongtai: The growth rate of M1 in September continues to increase, and it is expected that financial funds will flow back at the end of the quarter.

Zhongtai released a research report stating that in September, social financing increased by 3.53 trillion yuan, which was 229.7 billion yuan less than the same period last year, but the increase was higher than the consensus expectation of 3.27 trillion yuan. M1 growth continued to rise in September, and the gap between M2 and M1 continued to narrow. RMB deposits increased by 2.21 trillion yuan in September, which was 1.53 trillion yuan less than the same period last year due to a high base. It is expected that with the pressure on demand deposits, there will be a more significant flow of funds back into wealth management products at the end of the quarter. The operating models and investment logic of bank stocks have shifted from "pro-cyclical" to "weak cycle". The regional banks and large banks recommended include Bank Of Jiangsu, Qilu Bank Co., Ltd., Bank Of Hangzhou, Agricultural Bank Of China, etc. Zhongtai's main points are as follows: Social financing: In September, social financing increased by 3.53 trillion yuan, which was 229.7 billion yuan less than the same period last year, but the increase was higher than the consensus expectation of 3.27 trillion yuan. The year-on-year growth of new social financing was 8.7%, and the growth rate decreased by 0.1 percentage points from August. Social financing structure analysis: Credit remains the main drag, and the support for government bonds has further weakened. Specifically, 1. On-balance sheet credit: RMB loans increased by 1.61 trillion yuan in September, which was 366.2 billion yuan less than the same period last year. 2. Off-balance sheet credit situation: Undiscounted bank acceptance bills increased by 323.5 billion yuan, an increase of 192.3 billion yuan year-on-year; trust loans increased by 6.2 billion yuan, an increase of 5.6 billion yuan year-on-year; entrusted loans increased by 28.2 billion yuan, a decrease of 11 billion yuan year-on-year. The point about bank profit models transitioning from upturns to downturns. Specific recommended stocks include Bank Of Jiangsu(600919.SH), Qilu Bank Co., Ltd.(601665.SH), Bank Of Hangzhou(600926.SH), Agricultural Bank Of China(601288.SH,01288), as well as regional and large banks.