Against the backdrop of the banking sector's share prices frequently falling below net asset value, a number of listed banks have prioritized "market value management" on their agendas.
On July 20, China Everbright Bank Co., Ltd. (SHSE: 601818) responded to investors by stating that the bank has established a "market value management team" to comprehensively coordinate market value management efforts and actively safeguard the company's value and shareholder rights.
Earlier, in March, the management of China CITIC Bank Corporation Limited (SHSE: 601998) announced the establishment of a market value management team during its 2025 performance briefing to coordinate and promote the effective implementation of related work. In June, the management of China Merchants Bank Co., Ltd. (SHSE: 600036) stated at its shareholders' meeting that the bank has also formed a market value management team and holds regular market value analysis meetings.
Regarding the intensive establishment of market value management mechanisms by listed banks, a chief economist noted in an interview that forming such teams helps strengthen the linkage between capital market feedback and internal operational decision-making, establishing a more systematic two-way communication mechanism between the market and operations.
The economist analyzed that the value of these measures is reflected on multiple levels. First, incorporating market value management into internal performance evaluation systems creates a binding mechanism, ensuring substantial implementation rather than mere formality. Second, institutionalized arrangements signal to the market a proactive commitment to protecting shareholder value, thereby boosting investor confidence. Third, it shifts listed banks' market value management from ad-hoc responses to market fluctuations towards regularized value-oriented operations. This encourages banks to systematically manage and guide market perceptions while solidifying their operational foundations, aiming to create a virtuous cycle between business development quality and capital market performance.
From an industry perspective, banks' increased focus on market value management is also related to the sector's prolonged valuation pressure in recent years. A special researcher commented that the widespread occurrence of share prices below net asset value in the banking sector and its long-term low valuation have, to some extent, constrained banks' ability to raise external capital. A core objective for banks in establishing these teams is to improve market perception, promote value discovery, and facilitate valuation recovery through institutionalized operations. From this viewpoint, boosting investor confidence is a crucial goal of market value management.
The researcher believes that enhancing investor confidence is the starting point and ultimate aim of market value management. However, the path to achieving this is not simply about "stabilizing the stock price" but involves bridging the transmission mechanism between operations and the capital markets. This allows market recognition of a bank's long-term value to be based on verifiable fundamentals.
Regarding the valuation performance of the banking sector, the economist also pointed out that as of the first half of 2026, the price-to-book ratios of 42 A-share listed banks were generally below 1 times, mostly within the range of 0.5 to 0.7 times. The market capitalization of the A-share listed banking sector has significantly contracted, with share prices of Hong Kong-listed banks being even more depressed.
At the same time, the fundamental operations of listed banks remain generally stable, with most maintaining reasonable growth in revenue and profit and possessing strong risk resilience. The significant "expectation gap" between the solid fundamentals of listed banks and their depressed stock prices is prompting bank management to place greater emphasis on and proactively strengthen market value management.
Furthermore, financial regulators require companies with share prices persistently below net asset value to disclose plans for valuation improvement, imposing mandatory institutional constraints on market value management. In this context, listed banks are accelerating a shift from their previous passive response approach. They are elevating market value management from traditional investor relations work to an institutionalized arrangement involving strategic planning, internal performance evaluation, and decision-making mechanisms, with the aim of improving market expectations and enhancing the banks' value performance.