Logos of China's largest four lenders, Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China.

In a recent note circulated to customers, Citibank equity trader argues that capital-raising by Chinese banks will lead to a breakout rally:

“With bank share prices climbing back above their trailing book value again, the possibility of equity raisings is back on the table…If the banks do manage to recapitalize especially with funds from foreign institutional investors, then a major part of the bear case on Chinese banks will be removed and we would expect a substantial rally in bank and financial share prices even as the placements were taking place.”