Last week, the average daily trading volume of A-Shares was 912.316 billion yuan, an increase of 7.66% month on month. As of February 10, 2022, the balance of the two cities and two financial institutions was 172.352 billion yuan, a month on month decrease of 1.28%, 2.66% lower than the daily average level in 2021 (1768.449 billion yuan).
Last week, the CSI 300 index rose 0.82%, and the CSI all bond (net price) index fell 0.27%. As of February 11, 2022, the number of market pledged shares was 417.124 billion, accounting for 5.61% of the total share capital, and the market value of market pledged shares was 3801.974 billion yuan.
The insurance sector oversold and rebounded, and venture capital and H-share non bank performed better
Last week, non bank finance rose 6.03%, with an excess return of 5.20% compared with the Shanghai and Shenzhen 300 index, which rose 0.82%. Among them, the insurance sector rose 10.41% and the brokerage sector rose 3.55%. Non bank stocks with relatively good performance were distributed in financial technology, insurance, venture capital and H shares, Sinodata Co.Ltd(002657) (25.23%), Shenzhen Kingdom Sci-Tech.Ltd(600446) (15.76%) and China Life Insurance Company Limited(601628) (14.66%), and more than 18 of the 19 A + H non bank companies recorded increases.
Insurance oversold and rebounded, with excellent odds, both offensive and defensive, and high configuration value
The insurance sector is in the three-phase superposition of institutional low allocation + oversold + asset side marginal improvement of the real estate industry, showing an oversold rebound. In particular, the preference for undervaluation since the beginning of 2022 has brought potential capital inflows to the insurance sector on the one hand, and the equity position of insurance asset management in relevant sectors on the other hand is expected to achieve good returns. Due to the difficult recovery of insurance policies on the liability side and the limited size and quality of the agent team, the improvement of residents’ income is still one of the important factors determining the inflection point of insurance liabilities. Therefore, when the good and bad on the liability side and asset side affect hedging, the winning rate of insurance is not an advantage. However, the sector fell by 40% from the high level, with little downward space. Only a few positive factors are needed to promote the market upward, and the odds are excellent. In the process of valuation repair and oversold rebound of the insurance sector, the benefit targets are the weight China Life Insurance Company Limited(601628) with excellent pulling effect on the key index and Ping An Insurance (Group) Company Of China Ltd(601318) with relatively good debt side.
The two sessions are about to start, focusing on venture capital and financial technology benefiting from the comprehensive registration system
In December, the central economic work conference again proposed the comprehensive registration system, and the relevant regulations on stock issuance will also be included in the legislative work plan of the CSRC in 2022. We expect that the IPO process in 2022 will be the same as that in 2021, with about 40 IPOs per month. This provides a stable and smooth exit channel for PE fund, which is good for venture capital industry and emerging start-ups. The benefit targets are Jiangsu Huaxicun Co.Ltd(000936) (one village capital, focusing on semiconductors, media and new consumption) and Sichuan Shuangma Cement Co.Ltd(000935) (IDG Beijing core member). The comprehensive registration system will also bring the needs of updating and upgrading the trading integration system of securities companies, exchanges, fund companies and other investment institutions and the information disclosure system of listed companies. Financial technology represented by Hundsun Technologies Inc(600570) , Shenzhen Fortune Trend Technology Co.Ltd(688318) and vertex shares will benefit.
Considering the quality of enterprises to be listed and the law of enterprise development, the comprehensive registration system is not expected to bring a blowout of IPO. Therefore, the growth rate of investment banking business of securities companies will remain at a relatively stable level, with no obvious thickening in terms of revenue and net profit contribution. The beneficiaries are Tianfeng, Guojin, Hualin and CICC, which have a high proportion of investment banking revenue contribution.
The overall price to book ratio of securities companies is 1.63 times, lower than the average level of 2020 and 2021. At the same time, the roe level of securities companies has increased steadily. The mismatch between sector valuation and performance growth brings left configuration opportunities. The brokerage sector is arranged around the main line of wealth management – China stock market news with the best growth at the sales end; Guangfa and Xingye with high “base content” at the product end; Zhejiang merchants and Guolian, who actively serve private equity funds and improve the comprehensive business ability of institutions; China Thailand and Xiangcai Co.Ltd(600095) with high flexibility will benefit from the increase in the proportion of residents’ equity asset allocation.
One belt, one road, the other two sides, the whole system of stock issuance, the international trading system reform and the mature trading system, and the comprehensive account optimization of securities companies.
The brokerage sector has a strong beta attribute, so the liquidity, transaction activity and market sentiment of A-Shares will be magnified on the market of the sector. We expect that the next 2-3 quarters may be in the stage of wide liquidity to wide credit. For investors who pay attention to the layout signal on the right side of the securities business sector, they can pay attention to 1) the transaction volume of Shanghai and Shenzhen stock markets has been enlarged to more than 1.4 trillion yuan, 2) the daily transaction volume of the securities business sector (801193. SI) has been enlarged to 100 billion yuan, and 3) the securities lending scale of listed securities companies has shrunk rapidly.
Risk tips
The risk of sharp fluctuation of RMB against the US dollar, overseas epidemic and liquidity impact; China’s liquidity easing process is less than expected; The transaction activity of A-Shares has decreased, the compliance risk of listed companies and the qualification risk of shareholders of securities companies, paying attention to the information of shareholders’ reduction, the growth rate of new policy premiums in the insurance industry is lower than expected, and the interest rate is higher than expected.
