The index of the banking sector fell this week (1.24-1.28), and the price to book ratio was lf0.5 as of the last trading day of this week 64pb, lower than last week’s valuation, with a sharp decline in market heat. The average daily trading volume was 848.675 billion yuan (Mom – 22.96%). This week, the central bank invested 400 billion yuan in wide caliber (including 14 day reverse repo), and the 14 day reverse repo interest rate decreased by 10bps to 2.25%. The overall liquidity is in a wide balance; On Friday (January 28), it was announced that the weighted value of dr014 was 2.35%, which was close to the reverse repurchase level and had good overall liquidity.
19 A-share listed banks issued performance letters, which resonated with the stock price and stored rebound energy. This week, a total of three A-share listed banks announced their performance express, including one city commercial bank: Xiamen Bank Co.Ltd(601187) in 2021, the revenue increased by – 4.95% year-on-year to 5.280 billion yuan (excluding the impact of bill asset management business income in the same period last year, the year-on-year increase was 8.8%), and the net profit attributable to the parent increased by 18.65% year-on-year to 2.162 billion yuan, with the performance exceeding the expectation; Two rural commercial banks: Zhejiang Shaoxing Ruifeng Rural Commercial Bank Co.Ltd(601528) and Jiangsu Zijin Rural Commercial Bank Co.Ltd(601860) , the revenue increased by 10.50% and 0.56% to 3.325 billion yuan and 4.502 billion yuan respectively year-on-year, and the net profit attributable to the parent increased by 15.02% and 5.20% to 1.271 billion yuan and 1.516 billion yuan respectively year-on-year. The performance improved rapidly, the asset quality improved, and the business structure became more reasonable and diversified.
During the Spring Festival holiday, the overseas financial sector and the Hang Seng financial index sector performed well, and the overall profit expectation of the banking industry rose against the background of the expected increase in interest rates. During the holiday, the performance of Europe, America and Hang Seng financial sector was eye-catching, and the valuation level was significantly improved, which is of great indicative significance for the opening of A-share market after the year. At present, the United States and the United Kingdom have successively expressed their positions or demonstrated the direction of interest rate increase with practical actions. We can see that the interest rate spread performance of the financial industry in peripheral regions will show good performance in the future. When we focus on China, we can see that the overall profitability of the banking industry in 2021 continues to improve compared with that in 2020. Considering that the economic situation still faces many challenges, the regulators have reached a consensus that the policies in the first quarter will be put into force one after another to form a combination of positive pre policies, including appropriately arranging infrastructure investment in advance, continuously issuing policies to expand domestic demand Strengthen the support for the “three child policy”. We have confidence in the overall development of the banking industry in the “year of the tiger”. In addition to the gradual mitigation of some risks such as real estate, we see that the future policies will continue to boost the economy. We also see that the banking industry itself is active in the transformation and serving the real economy, with the dual channels of China and the world, With the increase of digital economy and the deepening of wealth management, the banking industry in transition deserves a more flexible valuation comparison system. The annual profit expectation of the “tiger” of the banking industry is stable and good, and the “recommended” rating is maintained.
Market performance
The banking sector index fell 3.47% this week, outperforming the market. This week, the Shanghai Composite Index fell 4.57%, the Shenzhen Component Index fell 5%, the gem index fell 4.14%, and the Shanghai and Shenzhen 300 index fell 4.51%. It is suggested to focus on high-quality joint-stock banks ( China Merchants Bank Co.Ltd(600036) , Industrial Bank Co.Ltd(601166) , Ping An Bank Co.Ltd(000001) ), large undervalued state-owned banks Postal Savings Bank Of China Co.Ltd(601658) , China Construction Bank Corporation(601939) and high-quality urban and rural commercial banks ( Bank Of Ningbo Co.Ltd(002142) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Chengdu Co.Ltd(601838) , Bank Of Chongqing Co.Ltd(601963) , Bank Of Hangzhou Co.Ltd(600926) , Bank Of Shanghai Co.Ltd(601229) , Shanghai Rural Commercial Bank Co.Ltd(601825) and Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) ).
Risk tips
Repeated epidemic risk, tightening of monetary policy, risk of increasing non-performing rate, outbreak of major risks and events of default, etc.
