Key investment points:
The industry index outperformed the market, and individual stocks rose and fell. From January 4 to January 28, the CSI 300 index fell 7.62% and the bank index rose 2.47%. Among the 30 primary industry indexes (CITIC), the performance of the bank index ranked first in the range. In the banking sector, the index of large state-owned banks rose 2.12%, the index of national joint-stock banks rose 1.95%, and the index of regional banks rose 3.97%. Individual stocks rose and fell. The top five banks were: Bank Of Chengdu Co.Ltd(601838) , Bank Of Jiangsu Co.Ltd(600919) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Postal Savings Bank Of China Co.Ltd(601658) , Bank Of Hangzhou Co.Ltd(600926) , and the bottom five banks were: Zhejiang Shaoxing Ruifeng Rural Commercial Bank Co.Ltd(601528) , Jiangsu Zijin Rural Commercial Bank Co.Ltd(601860) , Bank Of Qingdao Co.Ltd(002948) , Xiamen Bank Co.Ltd(601187) , Ping An Bank Co.Ltd(000001) .
The year-on-year growth rate of M2 increased in December, and the LPR in 1-year and 5-year periods decreased by 10bp and 5bp respectively in January. In December, the PMI of manufacturing industry was 50.1%, which continued to maintain the expansion range, but the ring ratio fell slightly; The year-on-year growth of CPI and PPI fell slightly, the growth rate of investment and consumption continued to fall slightly, and the import and export maintained rapid growth. In December, the increase of social financing scale increased year-on-year, mainly due to the increase of corporate bonds, government bonds and stock financing year-on-year, while RMB loans continued to increase less year-on-year. At the end of December, M2 increased by 9% year-on-year, 0.5 percentage points higher than that at the end of last month and 1.1 percentage points lower than that in the same period of last year. On January 17, the central bank lowered the MLF and reverse repo interest rate by 10bp. On January 20, the one-year LPR decreased by 10bp to 3.70%, and the five-year LPR decreased by 5bp to 4.60%.
Investment advice. From December 2021 to January 2022, the rhythm of reducing reserve requirement and interest rate is relatively compact. Referring to the previous interest rate cut cycle, the interest rate cut is not large. In addition, the current downward pressure on the economy is prominent. We expect that there is still room for further easing in the future. However, from the perspective of rhythm, the easing policy may come to an end in the short term, and the performance of economic and financial data in the first quarter may be the main reference basis for the rhythm and range of easing in the future. It is estimated that the direct impact of the decline of LPR in January on the bank’s net interest margin is about 7bp, and the cumulative impact of the one-year LPR decline of 5bp in December 2021 on the net interest margin is about 8bp. Due to the small decline of five-year LPR, banks with a high proportion of housing loans are less affected. It is expected that in 2022, the net interest margin of the banking sector will be low before and high after, the growth rate of total assets of the banking industry will be improved, the asset quality and provision coverage will continue to improve, and the performance growth will drop slightly, but still remain at a high level in recent years. It is believed that the current extremely low valuation level fully reflects the pessimistic expectation of the market on the credit risk exposure and macroeconomic downturn of the real estate industry. At present, the sector has high allocation value and maintains the investment rating of “stronger than the market”. It is suggested to focus on the head state-owned banks and joint-stock banks with solid asset quality, as well as the head urban commercial banks and rural commercial banks in regional economically developed areas.
Risk tip: the asset quality has deteriorated significantly, resulting in systemic risk.
