V-reverse!
In February 8th, the two cities’ main index varied, and the Shanghai stock index was hit by the technology, new energy and Baijiu, which once fell more than 1%, and the gem means 2800 points. In the afternoon, as financial stocks strengthened and new energy and technology stocks stopped falling and rebounded, the index rebounded rapidly. The Shanghai index became a V-shaped trend, and finally closed up 0.67%, the Shenzhen index fell 0.98% and the gem index fell 2.45%.
In terms of sectors, bank stocks rose collectively for two consecutive days. Four bank stocks with a market value of more than trillion yuan performed well, especially Industrial And Commercial Bank Of China Limited(601398) and China Construction Bank Corporation(601939) .
On the 8th, China Construction Bank Corporation(601939) , Industrial And Commercial Bank Of China Limited(601398) , Agricultural Bank Of China Limited(601288) , China Merchants Bank Co.Ltd(600036) closed up 3.26%, 2.32%, 2.00% and 0.70% respectively, and the market value reached 1.6 trillion yuan, 1.7 trillion yuan, 1.1 trillion yuan and 1.3 trillion yuan respectively.
In the collective pursuit of these big guys, listed banks also set off a small climax of stabilizing share prices! And bank executives use wages to stabilize stock prices.
On February 7, Bank Of Chongqing Co.Ltd(601963) and China Zheshang Bank Co.Ltd(601916) respectively issued suggestive announcements on the starting conditions for triggering measures to stabilize stock prices. From January 4, 2022 to February 7, 2022, the closing price of A-Shares of the two banks has been lower than the net assets per share for 20 consecutive trading days, reaching the conditions for triggering the measures to stabilize the stock price.
On the same day, Chongqing Rural Commercial Bank Co.Ltd(601077) issued an announcement on the plan to stabilize the stock price. Nine directors, supervisors and senior executives of the bank will increase their holdings of A-Shares of the company.
Why are most of the bank stocks that just intensively released the gratifying performance express last month still in a net breaking state? Industry insiders believe that the net breaking of bank stocks is common in recent years and has little to do with short-term performance changes. Investors should actively look for bank stocks with good and stable roe performance.
3 banks will stabilize the stock price
On February 7, Bank Of Chongqing Co.Ltd(601963) and China Zheshang Bank Co.Ltd(601916) issued suggestive announcements on the starting conditions for triggering measures to stabilize stock prices.
According to the announcement of Bank Of Chongqing Co.Ltd(601963) , from January 4, 2022 to February 7, 2022, the closing price of A-Shares of the bank has been lower than 10.91 yuan of 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) said that the board of directors of the company will formulate a specific plan for stabilizing the stock price of the bank within 10 trading days (February 21, 2022) from the date when the company’s stock price triggers the conditions for initiating 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.
According to the announcement of China Zheshang Bank Co.Ltd(601916) , from January 4, 2022 to February 7, 2022, the closing price of A-Shares of the bank has been lower than the net assets of 5.269 yuan per share for 20 consecutive trading days, meeting the conditions for triggering the measures to stabilize the stock price.
China Zheshang Bank Co.Ltd(601916) said that the company should formulate measures to stabilize the stock price within 10 trading days after the trigger date (February 7, 2022) and announced by the board of directors. The board of directors will be convened before February 21, 2022 to formulate and announce specific measures to stabilize the stock price.
Unlike the above two companies, Chongqing Rural Commercial Bank Co.Ltd(601077) has formulated a plan to stabilize the stock price. The bank’s announcement yesterday showed that nine directors, supervisors and senior executives will increase their holdings of Chongqing Rural Commercial Bank Co.Ltd(601077) A shares with their own funds that do not exceed 15% of the salary (after tax) received from the bank in the previous year. There is no price range in this shareholding increase plan, and the implementation period of shareholding increase is within 6 months from February 8, 2022.
However, subject to the sales restriction period of Chongqing Rural Commercial Bank Co.Ltd(601077) annual report and quarterly report, this shareholding increase plan will be actually implemented after the release of the company’s first quarter report in 2022.
Nearly 80% of bank shares broke the net
Since this year, 19 A-share listed banks have issued performance letters, and more than 60% of the banks’ net profit has increased by more than 20%. Good performance has also driven the upward tide of the banking sector.
According to the data, as of February 8, 19 banks have issued performance express reports for 2021, of which 12 banks’ net profit has increased by more than 20% year-on-year. Bank Of Jiangsu Co.Ltd(600919) ranked first with a performance growth rate of 30.72%, followed by Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) and Bank Of Ningbo Co.Ltd(002142) with a performance growth rate of 29.77% and 29.67% respectively.
Stimulated by good performance, bank stocks rose against the trend in January. Data show that the bank (Shenwan) index rose 2.33% in January, while the Shanghai and Shenzhen 300 index fell 7.62% in the same period.
Bank performance maintained rapid growth, but most bank shares are still in a net breaking state. Data show that as of the closing of February 7, among the 42 A-share listed banks, only 9 banks with Pb (price to book ratio) greater than 1, and nearly 80% of the bank shares broke the net.
Everbright Securities Company Limited(601788) Wang Yifeng, chief analyst of the financial industry, believes that the large-scale net breaking of bank stocks is mainly due to the uncertainty of asset quality on the asset side and the downward pressure of the economy. The high leverage ratio of banks makes it difficult to evaluate the equity. From the perspective of capital, bank shares have a high degree of homogenization, limited market funds and large contradiction between supply and demand. In overseas markets, it is also common for bank stocks to break the net.
Liao Zhiming, chief banking analyst of China Merchants Securities Co.Ltd(600999) , said that large-scale net breaking of bank stocks was common in recent years and had little to do with short-term performance changes. From the perspective of performance, banks with higher roe and profit growth will have higher valuations. At present, the overall valuation of the banking sector is still at a historically low level.
How to choose a good bank?
In the face of most broken bank stocks in the market, selecting a good bank stock has become a topic of concern for investors.
In Liao Zhiming’s view, the core indicator of judging a good bank is a stable high roe. At present, wealth management business that does not occupy much capital will bring higher roe to banks.
In addition, the business area of a bank will determine the development potential of the bank, and regional banks with good economic environment will have advantages; Excellent management, good corporate governance structure and clear business development strategy are also essential.
Wang Yifeng believes that the strategic positioning of a good bank is clear and will persevere in implementing its strategic objectives. In addition, the corporate governance structure should be improved, the management should strive and forge ahead, and the layout of the company’s business sector should meet the development direction of the new economy.
Looking forward to 2022, the macroeconomic downward pressure remains. Under the expectation of loose monetary policy, will there still be investment opportunities in bank stocks in the future?
Wang Yifeng said that in the early stage of this year, the investment opportunities of bank stocks mainly focus on stable growth. In the future, we are still optimistic about the long-term investment opportunities of bank stocks. It takes time for the valuation of the bank sector to rise, but we can find banks with good and stable roe performance.
Liao Zhiming believes that the stock price trend of bank shares in the future depends more on the market’s expectations of the economy and performance. After the economic policy center is transferred to steady growth, with the force of the policy, the subsequent economy will stabilize and recover and promote the repair of bank stock valuation.
According to the research report released by Citic Securities Company Limited(600030) , at present, the relevant policies of “stable growth, stable credit and stable expectation” are in the process of gradual overweight, and the logical chain of improvement of “loose policy – economic prosperity – credit risk expectation” is in the strengthening period. It is expected that from January to February, the market still has concerns about economic and credit risks, but in the medium term, the uncertainty of risk factors is decreasing. It is suggested to pay attention to the allocation value of the whole year dimension of the banking sector.
Before the Spring Festival, Goldman Sachs also released a research report saying that it maintained the “buy” rating of Postal Savings Bank Of China Co.Ltd(601658) Hong Kong stocks and raised the target price by 10.6% from HK $6.48 to HK $7.17. Goldman Sachs believes that Postal Savings Bank Of China Co.Ltd(601658) ‘s balance sheet structure is improving, providing more loan opportunities to offset any negative impact of easing, and its deposit ratio can support the increase of interest income.
Institution: after the short-term panic decline of CXO
is still one of the necessary tracks
Today, the overall decline of YaoMing stocks also attracted market attention. As of the closing of a shares, Wuxi Apptec Co.Ltd(603259) shares fell by the limit, and Hong Kong stock Yaoming biology fell by more than 22%.
When the leader encounters panic smashing, how will the CXO sector develop in the future? The reporter contacted a number of institutions for the first time. Most institutions believe that the CXO sector, which suffered a panic decline in the short term, is still one of the necessary tracks.
Yuan Zhidi, director of equity research of deppon fund, said that for Yaoming biology, its inclusion in the list may be related to the failure of overseas regulators to review its qualification in time from 2020 to 2021 due to the impact of covid-19 epidemic in the past two years. Included in UVL will be the bioreactor hardware and very few consumables (such as ultrafiltration membrane package) of two subsidiaries of YaoMing biology in Shanghai and Wuxi. From the publicly exchanged information, it can be learned that it has little impact on the business end of YaoMing biology. First of all, as the relevant plants and production settings have been completed, there is no additional procurement demand for the equipment end in the next 1-2 years; Secondly, besides American suppliers, the company also has European, Japanese and Chinese suppliers, and its supply chain is relatively safe; Finally, for some consumables, the company also has sufficient reserves, and the projects in hand will not be affected.
In view of the large decline of CXO sector today, for its follow-up investment opportunities, Yuan Zhidi believes that CXO sector, as an important part of high-end manufacturing industry, has a high overall prosperity of the track. From the perspective of industry research, enterprises above Designated Size have full order schedules and need to constantly digest orders by building new production capacity or even collecting and acquiring new production capacity, so from the medium-term perspective, The business end of the track is unimpeded. From the valuation side, the correction since the third quarter of 2021 has gradually adjusted most of the targets of CXO track to the valuation level of about 1 peg. In the short term, due to some event or policy derivative effects, it has an impact on the valuation. As an industry with high business uncertainty, it can still be a necessary track for the pharmaceutical industry after the inertia of panic decline ends and stabilizes.
According to Zhu Mingrui, a medical researcher of Nord foundation, for macromolecular CXO enterprises, since their filters and other consumables are still dependent on the United States, if they cannot be successfully removed from the list in the short term, it may have a certain impact on their subsequent development. For small molecule CXO enterprises, this decline actually has no impact on the fundamentals, so it may be a better time to buy. In addition, this event will benefit the medicine machine track to a certain extent. The relevant targets of today’s medicine machine track also have a good performance.
Hengyue Fund said that the expectation that the global epidemic will eventually be controlled has led to the ebb tide of investment in relevant industrial chains, and also raised concerns about the sustainability of CXO landscape. At present, the prosperity of CXO has reached a period of differentiation, and it is facing the process of valuation digestion in the short term. Based on the consideration of downstream demand, focus on the characteristic CXO companies and relatively undervalued companies serving new technologies, as well as the scarce CXO targets in Hong Kong stocks.
