Just after the Spring Festival, bank stocks set off a small climax of stabilizing stock prices. On February 7, several local banks issued suggestive announcements that triggered the conditions for the launch of measures to stabilize stock prices.
Bank Of Chongqing Co.Ltd(601963) 7 said that from January 4 to February 7, 2022, the closing price of A-Shares has been lower than the net assets per share for 20 consecutive trading days, reaching the starting conditions for triggering measures to stabilize the stock price.
Bank Of Chongqing Co.Ltd(601963) pointed out that the board of directors will formulate a specific plan to stabilize the stock price within 10 trading days (February 21, 2022) from the date when the stock price triggers the conditions for starting the measures to stabilize the stock price, implement it after fulfilling the relevant internal decision-making procedures and external approval / filing procedures (if necessary), and announce it in accordance with the information disclosure requirements of listed companies.
Similarly, China Zheshang Bank Co.Ltd(601916) triggered the starting conditions of measures to stabilize the stock price. The company issued an announcement on the 7th, and formulated measures to stabilize the stock price within 10 trading days after the trigger date (February 7, 2022), which was announced by the board of directors. The company will convene the board of directors before February 21 to formulate and announce specific measures to stabilize the stock price.
Compared with the above two banks, Chongqing Rural Commercial Bank Co.Ltd(601077) has formulated a plan to stabilize the stock price. The company announced on the 7th that it would start the increase of directors, supervisors and senior executives.
Specifically, as of February 7, 2022, there were 9 non independent directors and senior managers receiving remuneration at Chongqing Rural Commercial Bank Co.Ltd(601077) , including 5 non independent directors and 4 senior managers. Increase the holding of Chongqing Rural Commercial Bank Co.Ltd(601077) shares with its own funds that do not exceed 15% of the salary (after tax) received from the company in the previous year. The implementation period of this shareholding increase is within six months from February 8, and there is no price range in the shareholding increase plan.
However, it is worth noting that this round of increase in holdings was not started immediately. The reason is that the company is in the time window of annual report and quarterly report. Therefore, the shareholding increase plan of Chongqing Rural Commercial Bank Co.Ltd(601077) will be actually implemented after the release of the first quarter report of 2022.
Looking back, although the small climax of stabilizing the stock price occurred in the time window just after the Spring Festival, some companies have issued similar announcements as early as last year.
In December last year, for example, a number of local banks, including Bank Of Chongqing Co.Ltd(601963) , Jiangsu Zijin Rural Commercial Bank Co.Ltd(601860) , Shanghai Rural Commercial Bank Co.Ltd(601825) , Bank Of Xi’An Co.Ltd(600928) , issued announcements on the implementation progress of stock price stabilization schemes or measures. This shows that most bank stocks have been “undervalued” in the secondary market for a long time.
How low is the valuation of bank stocks? Some clues can be seen from the perspective of price to book ratio.
Take Chongqing Rural Commercial Bank Co.Ltd(601077) as an example, the latest net asset per share of the company is 9.13 yuan, but the closing share price of the company on February 7 is only 3.92 yuan, the P / E ratio is only 3.8 times, and the P / B ratio is only 0.45. From the overall perspective of the sector, more than 30 bank stocks in A-Shares are in a “broken net” state, accounting for more than 80%.
On this side, the valuation is relatively low, but on the other side, the performance maintains a relatively high growth rate. Since the beginning of this year, the performance express of the first batch of A-share listed banks has been freshly released. The net profit growth of many banks has exceeded 20%, and the net profit growth of small and medium-sized banks has exceeded 30%. Thus, it has also driven the short-term activity of the share price performance of the banking sector after the opening of the A-share year.
Triggering the starting conditions of the measures to stabilize the stock price will bring positive significance and positive impact on the short-term stock price performance of the relevant underlying banks. However, we should also see the B side of stabilizing the stock price.
Although bank stocks are the blue chip sector with low valuation in the current A-share market, the discount valuation of bank stocks is also in line with the cognition and expectation of relevant institutional investors. On the one hand, with the real estate entering the adjustment cycle, some investors are worried that bank assets and some bad debts are not reflected in the statements; On the other hand, some investors will worry that the growth of bank stocks is not as good as that of some high-tech companies.
