The Asian Football Confederation (AFC) said it was looking into the incident, which occurred in the latter stages of Guangzhou's 6-0 win over Hong Kong champions Eastern.
"The AFC is waiting for the match commissioner's report and then the AFC will make a full assessment of the facts," a spokesperson for the confederation told Reuters.
The report is expected to be received by the continental body later on Wednesday, with a decision on any further action due to be taken over the coming days.
The banner, which stated: "Annihilate British Dogs, Extinguish Hong Kong Independence Poison", was displayed in the section where around 700 visiting Guangzhou fans were seated.
Tensions were high in the run-up to the game at Mongkok Stadium with additional security measures in place to ensure Guangzhou fans who bought tickets online could not be seated with supporters for the home team.
Hong Kong officials have been sensitive to any prospect of trouble at sporting events featuring Chinese teams since street protests ground parts of the city to a halt in late 2014.
Similar restrictions were put in place when China's national team played against Hong Kong in World Cup qualifying inNovember 2015.
The controversy arose on the same evening fans of Kawasaki Frontale angered supporters in South Korea by raising a Japanese wartime flag during their meeting with Suwon Bluewings in the continental club competition.
Officials travelling with the club confiscated the flag, used by the Imperial Japanese Army until the end of World War II, from two men while other supporters were escorted from the stadium, according to Kyodo News.
A Suwon Bluewings official told Reuters on Wednesday: "As soon as the game began, one of supporters from Kawasaki Frontale held up and spread a Japanese wartime flag, which he had hidden in his bag.
"Security guards restrained him as soon as they spotted the flag. After the match, Suwon filed a complaint to the AFC since their regulations prohibit any actions supporting political issues or provocations that might cause controversy.
"Suwon presumes that the AFC would soon take measures regarding the issue."
With tensions in the region high in recent years, such displays at high-profile football matches are not uncommon and the AFC has been trying to clamp down on instances of political provocation.
Taiwan's football authorities were fined $5,000 (£3,894) by the AFC in June last year after fans displayed a banner calling for independence during an Asian Cup qualifying match with Cambodia in Kaohsiung.
(Reporting by Michael Church; Additional reporting by Yuna Park in Seoul; Editing by Peter Rutherford)
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