Huachuang Securities: The demand for savings may remain stable in overall quantity, and funds will gradually penetrate into the capital market.

Huachuang Securities released a research report stating that high savings among Chinese residents will continue to exist in the future, but from a marginal perspective, in an environment of declining real interest rates and gradually optimizing investment ecosystems, the demand for savings may remain stable in terms of total amount, but structurally transition towards bank wealth management, fixed income funds, pension insurance, and other products with low volatility and stable returns. Among them, bank wealth management and deposits, which have a natural channel connection, will be the biggest beneficiaries. Additionally, with the enrichment of bank wealth management products with stock rights and multi-asset strategy products, funds will gradually penetrate into the capital market. The main points of Huachuang Securities are as follows: The evolution of the bank wealth management business in China has gone through four stages: the budding period (2004-2008), rapid expansion period (2009-2012), regulation and rectification period (2013-2017), and from 2018 to the present, with the introduction of new regulations on asset management, bank wealth management has initiated the transformation towards net asset value. The scale first decreased and then increased, entering a new stage of development. From the perspective of institutional structure, the bank wealth management business has transitioned from being a department of the parent company to an independent wealth management subsidiary. From 2004 to 2018, it was the parent bank's asset management department model; from 2019 to the present, it is the wealth management subsidiary company model. By the end of 2025, there were 32 operating wealth management subsidiary companies nationwide, with the industry structure continuously improving, leading institutions guiding industry development, and industry concentration remaining within a reasonable range. As the industry transitions from "high-speed expansion" to "high-quality development", the approval of new wealth management subsidiaries is gradually tightening, entering a stage of high caution and selective approval. In terms of market share, wealth management subsidiaries hold an absolute market share. According to statistics from 2018 to 2025, the market share of bank wealth management subsidiaries has explosively increased, with over 90% market share by 2025, becoming the dominant force in the bank wealth management market. By the end of 2025, top wealth management subsidiaries presented a competitive structure of "two outstanding and many strong", with significant differentiation in scale levels. Reflecting on the historical development experience of bank wealth management business, there has been a very clear switch in the "driving factors" before and after the implementation of new asset management regulations. Bank wealth management business is essentially a process of dynamic balance and adaptation between fund side and asset side. Different market environments and regulatory orientations in various stages of development have led to fundamental shifts in the dominant positions of "asset supply" and "fund demand" in business development, forming two core development models of "asset-driven" and "demand-driven". During the asset-driven period, the core competitiveness of bank wealth management business lies in the ability to acquire high-yield assets; after the implementation of new asset management regulations, the core drive of bank wealth management business shifted towards the release of resident wealth management demands. By the end of 2025, the scale of household deposits in China's financial institutions reached 165.9 trillion yuan. In 2026, term deposits reaching maturity are expected to be concentrated in the range of 5-6 trillion yuan, accounting for about one-third of total savings, with a significant uncertainty as to whether this portion of funds will continue to stay in deposits along the original path. Meanwhile, the financial wealth management market in China has made significant progress in recent years, with the development of investment advisory systems providing more possibilities for the "re-allocation" of massive funds. Reasoning from the perspectives of long, medium, and short terms: In the short term, with the CPI rising to 1.3% in February and real interest rates swiftly dropping to negative values, theoretically, residents' consumption tendency would increase, savings inclination would decrease, and income expectations are expected to moderately recover. Although it is difficult to quickly return to pre-epidemic levels, supported by policies and structural transformation, residents' income confidence is expected to gradually improve, showing a positive trend of stability and increase. In the medium term, significant progress has been made in the construction of the capital market system and the accessibility of capital to the market in recent years. The deepening reform of the basic institutional structure of the capital market, the significant improvement in the adaptability of wealth management services, and the rapid development of artificial intelligence technology have become exciting variables in reshaping resident wealth management, accelerating the process of converting savings into investments. In the long term, looking at the demographic structure, China faces the aging problem similar to Japan in the 1990s. On one hand, the precautionary motivation of "high savings" is long-term and will not easily disappear due to the decline in interest rates; on the other hand, in a low interest rate environment, the willingness to invest marginally rises, and cash management, fixed income bank wealth management, and insurance products with low volatility characteristics are expected to absorb a portion of the savings migration. Risk warnings: Actual interest rate rebound lower than expected, net asset value fluctuation of wealth management exceeds expectations, and policy promotion of bank wealth management business is lower than expected.