How would property sector impact China banks?
- Property sector performance is the main investor concern vis-à-vis banking sector YTD
- Expect loan growth and asset quality to remain weak in short term
- Expect no large changes in banks’ property exposure strategy at the time being, as the NPL impact is controllable
- Negatives are largely priced in while we expect short-term volatility, long-term top pick remains PSBC (1658 HK)