Citigroup Securities' 2026 Investment Strategy: The Rise of New Financial Forces, Focusing on the Main Theme of Cycle Rotation.

Citic Securities research report stated that the financial industry is currently at a turning point in the cycle. Since 2025, interest rates have ended their unilateral downward trend, concerns about spread losses in the insurance industry have eased, the securities industry has stabilized fees under the "anti-inner flapping" policy, the banking industry's interest margins have stabilized, and the overall operating environment of the industry has significantly improved. Looking ahead to 2026, it is expected that economic recovery will drive demand for finance to warm up: savings migrating to insurance will promote new business growth, active capital markets will boost securities firm profits, and wealth management in banks will continue to improve. Insurance funds, as market ballast, will continue to increase their allocation to high-dividend financial stocks, leading value discovery. In terms of investment strategy, it is recommended to grasp the sector rotation in the recovery cycle. The insurance sector combines performance flexibility with long-term logic and is the preferred field; the securities sector benefits from increased market activity, with leading companies and potential mid-sized securities firms worth watching; the banking sector demonstrates stable dividend returns and fundamental value recovery value. Overall, the financial sector has entered a new round of growth cycle.