In-depth research: Why did I list Beijing Bank as the first heavy allocation in my 'pension account'?
An investor who has studied bank stocks for ten years finally figured out three things.
Preface: A story of 'missing out'.
I missed more than 2 yuan of Agricultural Bank.
I missed 10 yuan of China Merchants Bank.
I missed the 7% dividend yield of Industrial Bank.
Every time I miss out, I can find a reason: the bank is too slow, the market is too large, and the real estate risks have not cleared.
Looking back ten years later, what I truly missed was not the stocks, but the understanding that 'slow is fast'.
This article is a thorough review of my ten years of research on bank stocks. If you have ever hesitated in front of bank stocks, I hope it can help you avoid some detours.
Chapter 1, Why Now?—The 'Awakening Moment' of Bank Stock Investment
Last Friday, I bought Beijing Bank again at 5.32 yuan.
This has been three months since I first established my position (5.69 yuan). Three months, and the stock price has become cheaper by 0.3 yuan. To many, this is not worth getting excited about. But for me, this is the market's gift to the patient.
In the past few years, I made a fatal mistake: always waiting for the 'best time'.
· In 2018, bank stocks collectively broke net asset value, I said to wait a bit longer.
· In 2020, the pandemic created a golden opportunity, I said to observe further.
· In 2022, the dividend yield reached 7%, I said to wait and see.
The result was: China Merchants Bank rose from 10 yuan to 50 yuan, Agricultural Bank rose from 2 yuan to 5 yuan, and I was still empty-handed.
This time choosing Beijing Bank is not because I predicted anything, but because I finally realized a truth: the best timing is never a precise bottom, but the moment you truly understand.
Chapter 2, Why Banks?—The Underlying Logic of the Mother of All Industries
Finance is the mother of all industries.
I have repeated this sentence for ten years; I truly understood it last year.
What is the essence of a bank? It is the 'circulatory system' of society. Enterprises need loans to expand, individuals need mortgages to buy houses, and the country needs credit to develop. As long as the economy is still operating, banks cannot disappear.
But what truly made me decide to heavily invest in banks are three numbers:
5%+
This is the bottom line for the dividend yield of high-quality bank stocks. What does 5% mean? All wealth management products on the market with capital protection and interest have yields that have fallen below 3%; the yield on a ten-year treasury bond is around 2.5%. A 5% dividend yield means you don't have to do anything and can still outperform the vast majority of fixed-income assets every year.
10-15%
This is my annualized return target. If the bank contributes a 5% dividend, the rest only requires less than 10% fluctuation in the stock price to achieve. This fluctuation, in the A-share market, could exceed a month's ups and downs.
Perpetual
This is the most scarce attribute of banks. There were banks a hundred years ago, and there will still be banks a hundred years later. You can choose not to drink liquor, but you cannot avoid using banks.
These three numbers combine to form the most robust investment model in my eyes: high dividend as a base, low volatility in conjunction, and time as a friend.
Chapter 3, Why Beijing Bank?—A Detailed Breakdown of Fundamentals.
3.1 Dividend Yield: 6% 'Cash Cow'
This is the indicator I value the most.
According to the recent dividend distribution pattern of Beijing Bank—10 shares pay 3.2 yuan, calculated at the current price of 5.3 yuan, the dividend yield is exactly 6%.
Let's do some calculations:
If you hold 2 million yuan worth of Beijing Bank, the annual dividend would be 120,000 yuan. Averaged out per month, that’s 10,000 yuan in cash arriving.
A monthly income of 10,000 yuan in third and fourth tier cities is already considered a mid-to-high level. And this money does not require you to work, worry, or watch the market. Its only requirement is: you are willing to hold onto the stocks and let the dividends happen.
This is my understanding of 'financial freedom'—not getting rich, but having a machine that continuously generates cash.
3.2 Regional Advantage: One of the Most Profitable Enterprises in Beijing.
I did a statistic: in Beijing, the ranking of enterprises' net profits, Beijing Bank ranks 20th.
Among the top 20 enterprises:
· 18 are central enterprises.
· 1 is Minsheng Bank.
· 12 are financial enterprises.
· 9 are banks
This ranking reveals several facts:
· Finance is the core industry of Beijing.
· Banks are a core component of finance.
· Beijing Bank is one of the few local banks headquartered in Beijing with a market value of over 100 billion.
What does it mean to work in a bank in Beijing? It means the client resources are the best in China—central enterprise headquarters, ministries, universities, hospitals, and technology giants. This locational advantage is something no local bank can replicate.
3.3 Business Model: 'Thin Profit and High Sales' at a Trillion Scale.
The business model of banks is very simple: absorb deposits, issue loans, and earn interest spreads.
But once the scale expands, simple businesses turn into extremely high barriers.
Look at the size of Beijing Bank:
· Deposits: 2.26 trillion (deposit interest rate 1.85%)
· Loans: 2.11 trillion (loan interest rate 3.94%)
· Net interest margin: 1.47%
An interest margin of 1.47% looks thin as a blade. But multiplied by 2 trillion in scale, it translates to 51.9 billion in interest income every year. Along with other businesses, total annual revenue is 69.9 billion, net profit is 25.8 billion.
Of the 25.8 billion profit, 6.7 billion was distributed to shareholders. This is the power of scale—thin profit, but high sales; high sales, but stable.
3.4 Employee Profile: Average 500,000 in value.
Another side data worth noting: Beijing Bank's employee compensation expenditure in 2024 is 9.881 billion yuan, calculated based on 19,000 employees, with an average annual salary of 500,000 to 520,000 yuan.
What does this number indicate?
· Banks are still a high-income industry.
· To meet this threshold, at least provincial key level or above.
· The quality of such employees means that risk control levels are basically guaranteed.
Investing in a company, looking at its employee treatment is an interesting perspective—companies willing to pay high salaries usually do not wish to let themselves go bankrupt.
3.5 Safety Margin: Will only buy high, will not buy wrong.
I have summarized a saying: for bank stocks with guaranteed dividends, one can only buy high, not buy wrong.
What does buying high mean? Buying at 5 yuan and it drops to 4 yuan; that means you bought high.
What does it mean to buy wrong? If the company you bought goes bankrupt, that is called buying wrong.
Bank stocks belong to the former—they may be bought at short-term highs, but as long as the company continues to make profits and distribute dividends, time is the remedy. Moreover, banks in Beijing, banks that generate a million profits per capita, and banks with a 6% dividend yield, are far less likely to go bankrupt than to drop 10%.
Chapter 4, Technical Analysis: Secrets Hidden in Monthly Charts
Monthly Line (Non-ex-rights)
· Historical low: around 4 yuan
· Current price: 5.3 yuan
· Strategy: If it falls to 5 yuan, continue to add positions; if not, hold for interest.
Monthly Line (Ex-rights)
· Rule 1: The bottom keeps rising.
· Rule 2: After each rise, there must be a correction.
· Conclusion: To buy good chips cheaply, you need patience.
Daily Line
· Support level: 5.2 yuan
· Resistance levels: 60-day line, 120-day line.
· Expectation: Fluctuation adjustment, waiting for moving average repair
Based on a 7% dividend yield, the corresponding price is 4.57 yuan. This means: if it falls to 4.57 yuan, the dividend yield will rise to 7%, which would be a more worthwhile position to add.
Chapter 5, Investment Philosophy: Slow is Fast, Less is More
I wrote this article not to recommend Beijing Bank.
I want to share a truth I understood after ten years: the shortcut to investing is to admit there is no shortcut.
I once wanted to seize every opportunity, only to miss the real opportunities.
I once wanted to avoid every adjustment, only to miss the entire rise.
I once wanted to find the perfect buying point, but ended up missing even the qualified points.
In the end, what truly makes people feel at ease is not precise timing, but high-quality assets.
Beijing Bank is such an asset:
· It gives you 6% cash every year.
· It does a trillion business in the core area of Beijing.
· It attracts the best talent with a salary of 500,000.
· It has existed for twenty years and will continue to exist for another twenty years.
Holding such assets, you don’t need to watch the market every day, don’t need to worry about sudden disasters, don’t need to guess the main force's movements. You just need to do one thing: wait for the dividends to arrive, then continue to buy.
This is what I understand as 'positive cycle'—the chicken lays eggs, the eggs hatch into chickens. What is needed is just time.
Epilogue: Starting today
At the moment I bought last Friday, I noted a sentence in my account:
"This is the first retirement stock in my collection."
In the future, there will be a second and third. The standard remains unchanged: a dividend yield of over 5.5%, stable business, superior location, and reliable management.
If you ask me, is it too late to buy now? My answer is:
The best time to build a position was ten years ago, and the next best time is today.