I. Sector View: under the current environment, we should actively pay attention to the investment cost performance of bank stocks.
From top to bottom, from the perspective of industry logic: no matter how the current market environment evolves, the sector deserves active attention.
1) under the expectation of steady growth, the marginal improvement direction of bank stock fundamentals is relatively certain.
A. volume: Policy overweight + according to our recent intensive research, the total amount of credit is expected to be basically the same as that in 21 years, and Q1’s “good start” is not pessimistic. In January, the investment of most banks was relatively stable. After conservatively considering the slow investment progress of some joint-stock banks, unlisted urban and rural commercial banks (assuming a decrease of 10%), it is expected that there will still be 3.48 trillion yuan of new RMB loans in January (3.58 trillion yuan in the same period last year). At present, the determination of the steady growth policy of “promoting with stability” and “moving forward” has been relatively clear (such as the policies of maintaining the stability of real estate, guiding to meet the demand for reasonable mortgage and development loan, the finance “moderately ahead of infrastructure investment” and continuing to increase the small and micro credit support of green manufacturing industry). With the continuous implementation of policies, many banks expect the future demand to continue to improve. The market may disagree on the strength or rhythm of steady growth, but the trend of marginal improvement in the general direction is certain.
B. price: Although the interest rate cut affects the yield of bank loans, considering the reform of deposit self-discipline mechanism and the reduction of reserve requirements, we calculate that the bank interest margin will remain basically flat in 2022. From the previous interest rate reduction cycles, compared with the interest rate spread, the catalytic effect of economic stabilization expectation on bank stocks is more obvious.
C. performance express: it is being intensively disclosed that most banks perform well and continue to maintain a high growth trend, or form a catalyst for the bank’s share price.
In the long run, if the interest rate increase of overseas stocks is disturbed, 2) if the interest rate increase of overseas banks is often disturbed. During the Spring Festival, the UK has raised interest rates, the global interest rate hike is expected to rise, the risk-free interest rate will rise, and the market may be subject to shocks. Bank stocks are also stocks, and the DDM model is also applicable. Due to the tightening of liquidity expectations and the fear of credit risk exposure, they may “cover the decline”. However, due to the upward expectation of interest rate, bank stocks can often obtain relative returns.
From the bottom up, three main lines are recommended for individual stocks, and “small stocks” are selected β Combination “: 1) select high-quality stocks and cross the cycle; 2) Wealth management, China is in the “tuyere” of outbreak. 3) “Wide credit” or on the road, regional leaders and high-quality small and medium-sized banks have expansion flexibility. Starting from the above three main lines, we select “small” β Portfolio “: robust leading stocks ( Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) ), banks with undervalued retail characteristics and improved operation ( Postal Savings Bank Of China Co.Ltd(601658) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Ping An Bank Co.Ltd(000001) ), high-quality small and medium-sized banks with expansion flexibility and strong willingness to convert convertible bonds into shares ( Bank Of Nanjing Co.Ltd(601009) , Bank Of Chengdu Co.Ltd(601838) , Bank Of Hangzhou Co.Ltd(600926) , Bank Of Suzhou Co.Ltd(002966) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) ).
II. What major events in the financial sector deserve attention during the Spring Festival?
Market: the global stock market has recovered, and Hong Kong financial stocks generally rose
1) global stock market recovery: US stocks have recovered from the downward trend since the beginning of the year. The S & P 500 index fell 10.9% from 4797 points on January 3 to a low of 4327 points on January 27, and then gradually recovered 4.0% to 4501 points on February 4. The trend of Nikkei index and FTSE index is basically the same as that of US stocks. The Nikkei index rebounded by 4.9% to 27440 points after reaching a low of 26170 points on January 27, and the FTSE index rebounded by 3.0% to 7516 points after reaching a low of 7297 points on January 24.
2) the performance of Hong Kong stock financial sector is good: the cumulative return of Hang Seng financial index since the beginning of the year is 10.8%, which is 5.2% higher than that of Hang Seng Index. During the Spring Festival from January 31 to February 4, the Hang Seng financial index rose 3.2% to 3750 points, a new high since Q3 last year.
Macro: PMI fell in January, and overseas interest rate hikes are expected to rise.
1) China: PMI fell in January. In January, the PMI of manufacturing industry was 50.1% (the former value was 50.3%), and that of non manufacturing industry was 51.1% (the former value was 52.7%). Among them, the PMI of large enterprises increased by 0.3pc to 51.6%, the PMI of small and medium-sized enterprises decreased by 0.8pc, 0.5pc to 50.5% and 46.0% respectively, and the PMI of service industry decreased by 0.9pc to 55.4%. The fall of PMI in January was partly related to the Spring Festival (the Spring Festival in 2011, 14, 17 and 19 was at the end of January and the beginning of February, and the PMI of manufacturing and non manufacturing industries fell by 0.4pc and 0.5pc respectively on average). It is expected that the steady growth policy will continue to increase in the future to support the real economy and demand.
2) overseas: on February 3, the Bank of England raised interest rates continuously for the first time since 2004, raising the interest rates of major banks to 0.5%. Although the European Central Bank did not raise interest rates, it will also stop purchasing net assets under the PEPP plan at the end of March 2022. In addition, the Czech central bank and the Brazilian Central Bank also raised interest rates successively.
Supervision: the CBRC held a 2022 working meeting and formulated more than 40 objectives in 6 major areas. Compared with the goal of 2021, 2022:
1) the relevant objectives of supporting the economy have been significantly strengthened. In 2021, the CBRC stressed the need to “maintain the necessary support for economic recovery” and “maintain the basic stability of macro leverage ratio”. In 2022, it was changed to “fully support and stabilize the macro-economic market”, and new specific objectives were proposed, such as “supporting moderately advanced infrastructure investment”, “reasonably increasing financing supply, ensuring financing for key areas and major projects in the 14th five year plan” and “innovating to support major national scientific and technological tasks”.
2) more emphasis on “bottom line thinking” in resolving risks. It is emphasized to deal with risks in accordance with the basic policy of “stabilizing the overall situation, overall coordination, classified policy implementation and accurate bomb dismantlement”. In terms of real estate, it is also clear that “implementing policies for the city to promote the virtuous cycle and healthy development of the real estate industry”. Shadow banks should continue to be dismantled, but the harsh expressions such as “hit when exposed” have been deleted.
3) the financing requirements of small and micro enterprises are “increment, expansion and price reduction”. In contrast, in 2022, emphasis was placed on increasing the first loan, renewal loan, credit loan and medium and long-term loan.
4) compared with 2021, some specific targets are proposed, including:
A. considering the downward pressure of the economy, the new proposal of “properly coping with the rebound of non-performing assets” was put forward.
B. after the expiration of the transition period of the new asset management regulations, it is proposed to “promote the high-quality development of asset management business” and “promote the transformation and development of trust companies”.
C. in terms of supervision and administration, it is necessary to “further improve the risk monitoring and early warning system”, “improve the deterrence of off-site supervision and strengthen the sharp sword effect of on-site inspection”, etc.
D. the new proposed to “strive to promote the digital transformation of financial service industry”;
E. others: do a good job in supporting the Beijing Winter Olympic Games, speed up the disposal of illegal fund-raising deposits, promote the reform of policy bank ledger, guide large banks to improve the level of comprehensive financial services, and promote the role of China’s financial talent pool.
Industry: the growth rate of Q4 fund sales rebounded, and the performance of listed banks in 2021 was excellent. 1. Compared with 21q3, the growth rate of 21q4’s ownership scale rebounded month on month, and the concentration increased. The growth rate of Bank Of Jiangsu Co.Ltd(600919) , Bank Of Ningbo Co.Ltd(002142) , Bank Of Shanghai Co.Ltd(601229) was faster.
1) industry: in 2021q4, the top 100 institutional equity (stock + mixed) funds were sold on a commission basis, with a scale of 6.46 trillion yuan, Q3 + 4.9% month on month, and the holding scale of non commodity funds was 8.33 trillion yuan, with a growth rate of + 8.7% month on month, which was higher than Q3; The market share of top 100 institutional equity and non monetary funds was 80.3% and 57.9% respectively, up 7.3pc and 7.6pc respectively compared with Q2.
2) various types of consignment agencies: the shares of banks and independent sales agencies have increased, while the shares of securities companies remain unchanged. In the top 100 list, the ranking by scale is as follows: A. equity funds (stock + hybrid), banks (3.79 trillion yuan), independent sales institutions (1.67 trillion yuan) and securities companies (0.94 trillion yuan), with market share of 47.1%, 20.8% and 11.7% respectively. Banks and independent sales institutions increased by 1.9pc and 1.6pc month on month compared with Q3, and securities companies remained basically unchanged; B. Non monetary funds, banks (4.40 trillion yuan), independent sales institutions (2.83 trillion yuan) and securities companies (1.02 trillion yuan), accounted for 30.6%, 19.7% and 7.1% respectively, up 2.0pc, 2.7pc and 0.1pc respectively compared with Q3.
3) in terms of branches, A. independent consignment agencies, and three giants ant fund, Tiantian fund and tengan fund, the non commodity base maintained scale increased by 8.6%, 16.5% and 11.2% month on month respectively, among which the non commodity base scale of tengan Fund (178.4 billion yuan) increased by 1 to 10 compared with Q3. Independent sales organizations, especially Internet platforms such as Tiantian fund and ant, have expanded rapidly relying on their own traffic advantages. Relying on the volume of “small and scattered” long tail customers “, the scale of Q4 has continued to grow rapidly. B. Bank, China Merchants Bank Co.Ltd(600036) Q4 (stock + mixed) fund ownership reached 791 billion, continuing to lead the whole industry, with a steady increase of 8.3% month on month (Q3) and 870.1 billion non commodity basic guarantee, with a steady increase of 11.4%. The scale of Bank Of Jiangsu Co.Ltd(600919) , Bank Of Ningbo Co.Ltd(002142) , Bank Of Shanghai Co.Ltd(601229) non commodity basic insurance increased by 22.7%, 19.7% and 15.1% to 28.1 billion, 87 billion and 39.7 billion respectively. The three banks are located in the Yangtze River Delta. The wealth management business has a good development foundation and performs well in line with the rhythm of a good start. 2. A. the bank’s revenue and profit maintained good growth. The overall growth rate of revenue and profit of 19 banks in 2021 was 10.9% and 21.5% respectively, of which the growth rate of revenue and profit in 2021q4 single quarter was 12.1% and 20.9% respectively, which was basically the same as that in the third quarter, and most banks had a single quarter profit growth rate of more than 20%. B. The scale of assets and liabilities increased steadily. The overall total assets of 19 banks increased by 2.6% compared with the end of September, including 1.9% increase in loans and 3.0% increase in deposits. As Q4 approaches the end of the year, the growth rate of bank scale will naturally slow down, and the bank credit supply in 22 years may have a good start. Compared with the same period of last year, the supply volume may increase. C. Asset quality continued to improve. The overall non-performing rate of 19 banks was 1.05%, which continued to decline by 3bps compared with the end of September, and the provision coverage increased by 7.2pc to 311.3%.
III. regular data tracking: (this week refers to 1.24-1.30 days, the same below). 1) Interbank certificates of deposit: A. volume: according to wind data, the issuance scale of interbank certificates of deposit this week was 0.33 trillion yuan, a decrease of 0.02 trillion yuan compared with last week; Since January, the issuance scale of interbank certificates of deposit has been 1.12 trillion yuan, with a month on month decrease of 0.12 trillion yuan; B. Price: the issuing rate of interbank certificates of deposit this week was 2.45%, down 13bps from last week; So far this month, the issue interest rate is 2.55%. 2) Trading volume: the average daily turnover of stocks this week was 0.85 trillion yuan, down 0.25 trillion yuan from last week. 3) Two financing: the balance of two financing is 1.74 trillion yuan, an increase of 2.19% over last week. 4) Fund issuance: this week, non monetary funds issued 42.807 billion shares, down 3.358 billion from last week. 5) Bill interest rate: the discount rate of three-month state-owned banks + joint-stock banks’ silver notes this week was 3.14%, up 72 BPS from last week; So far this month, the interest rate is 2.70%, up 214bps month on month. The three-month bank note discount rate of urban commercial banks was 3.45%, up 93bps from last week, and the interest rate so far this month is 2.86%, up 203bps from last week. The rise of bill interest rate is obvious or mainly due to two reasons: A. seasonal shortage of funds at the end of the year; B. Under the policy overweight (especially after the central bank held a press conference), banks are encouraged to speed up lending, and the accelerated pace of lending also drives the upward movement of bills. 6) Issuance scale of local government special bonds: 361.848 billion new special bonds were issued this week, an increase of 277.521 billion over last week. Since the beginning of the year, 541.597 billion local government bonds have been issued. The amount of local government bonds approved in advance in 2022 is 1.46 trillion.
Risk tip: the risks of real estate enterprises erupt intensively, and the macro-economy goes down; The promotion of capital market reform policy is less than expected; The sales of guaranteed products of insurance companies were lower than expected.
