In January, Shenwan bank recorded an increase or decrease of 2.33%, outperforming the Shanghai stock index by 9.97% and the Shanghai and Shenzhen 300 index by 9.95%. The monthly increase or decrease ranked first among Shenwan’s 28 primary industries. Bank Of Chengdu Co.Ltd(601838) led the gains (16.83%).
The valuation of the banking sector rose. As of January 28, the overall price earnings ratio (historical TTM) of the banking sector was 5.16x, an increase of 0.20x compared with the end of last month and a discount of 71.13% compared with the valuation of a shares; The overall price to book ratio of the sector was 0.61x, a slight increase of 0.02x compared with the end of last month, with a discount of 66.29% compared with the valuation of a shares.
Various interest rates showed a downward trend. As of January 30, the maturity yields of AAA 1m / 3m / 6m interbank certificates of deposit were 1.80%, 2.25% and 2.35% respectively, and the maturity yields of AA 1m / 3m / 6m interbank certificates of deposit were 1.91%, 2.36% and 2.51% respectively, showing a downward trend month on month. In January, the weighted average interest rate of interbank lending was 2.01%, down 1bp month on month and up 22bp year on year.
Investment suggestions: bank stocks performed well in January, with outstanding absolute and relative returns. The reasons behind the analysis are as follows: first, banks successively disclosed performance express reports, most of which performed well and exceeded market expectations, so as to resolve the pessimistic expectations of the economic downturn on bank performance; Second, the economy grew steadily, policies boosted market confidence, and the reduction of interest rates promoted the continuous growth of total credit, opening up the space for the future development of banks; Third, the Fed’s expectation of raising interest rates has become more and more clear, and the market position adjustment has increased. As a defensive sector of undervalued value, bank stocks have become the market target. The policy of steady growth continues to work, the local real estate policies are gradually relaxed, and the positive signals of banking business expansion are frequent. At the same time, the performance express disclosed by the bank shows that the performance of the banking industry has grown steadily, the asset quality continues to improve, the early negative factors such as the economic downturn and real estate risk have gradually subsided, and the valuation of listed banks is expected to rise. It is suggested to grasp the high-quality banks with perfect and distinctive business layout, good asset quality and benefiting from steady economic growth: China Merchants Bank Co.Ltd(600036) , Bank Of Ningbo Co.Ltd(002142) , Ping An Bank Co.Ltd(000001) , Industrial Bank Co.Ltd(601166) , Postal Savings Bank Of China Co.Ltd(601658) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) . Maintain the rating of “synchronous market” in the industry.
Risk tip: economic growth is less than expected; Policy adjustment exceeded expectations; Asset quality declined.
