Since the year of the tiger, although the overall market performance has been poor, the banking sector has started a counterattack. Statistics show that the bank index rose 6.14% in five trading days, and several stocks performed well. In this context, three banks have successively issued relevant announcements to stabilize the stock price and “protect the market”.
more than 70% of banks “break the net”
three banks “protect the market”
Recently, China Zheshang Bank Co.Ltd(601916) , Bank Of Chongqing Co.Ltd(601963) have announced that the closing price of the company’s A-share stock has been lower than the latest audited net assets per share for 20 consecutive trading days, reaching the starting conditions for triggering measures to stabilize the stock price. According to the plan for stabilizing share price, the company will formulate and announce specific measures for stabilizing share price within 10 trading days.
Chongqing Rural Commercial Bank Co.Ltd(601077) also issued an announcement on the plan to stabilize the stock price on the same day. Chongqing Rural Commercial Bank Co.Ltd(601077) said that according to the plan, nine directors and senior managers increased their holdings and fulfilled the obligation of stabilizing the share price without repurchase of shares.
These three banks are not the first time to start measures to stabilize share prices. As Bank Of Chongqing Co.Ltd(601963) the “first a + H-share listed city commercial bank in the west”, the price of Bank Of Chongqing Co.Ltd(601963) fell by the limit the next day after the opening of the first day of listing, and then the share price has been in a volatile downward trend. Half a year after its listing, it issued an announcement on measures to stabilize the share price. However, as far as the current situation is concerned, this measure has failed to alleviate the decline of its share price. As of the closing of February 11, the share price of the stock has fallen from the issue price of 10.83 yuan to 4.06 yuan.
In addition, Chongqing Rural Commercial Bank Co.Ltd(601077) issued several announcements on stabilizing the stock price in December 2019, June 2020 and January 2021. China Zheshang Bank Co.Ltd(601916) in January 2020 and February 2021, announcements on measures to stabilize the stock price were also issued, and more than 10 directors and senior managers increased their holdings to fulfill the obligation of stabilizing the stock price.
According to statistics, at present, 30 listed banks in A-Shares are in a “broken net” state, accounting for more than 70%. China Minsheng Banking Corp.Ltd(600016) , Hua Xia Bank Co.Limited(600015) the current price to book ratio is only about 0.4 times. In the state of “breaking the net” in a large area of bank stocks, many banks triggered the mechanism of stabilizing stock prices.
In fact, in 2021, Bank Of Xi’An Co.Ltd(600928) , Jiangsu Zijin Rural Commercial Bank Co.Ltd(601860) , Shanghai Rural Commercial Bank Co.Ltd(601825) and other local commercial banks successively issued announcements on the implementation progress of stock price stabilization schemes or measures. This phenomenon is due to the long-term undervaluation of the banking sector.
northward capital flows into the banking sector
institutions are optimistic about the valuation and repair space
Known as “smart money”, northbound funds have continued to flow into the undervalued financial sector recently, and bank stocks are also favored by funds. According to the statistics of Guolian futures, in the past month, the net inflow of northbound funds into the financial sector exceeded 14 billion, accounting for 40% of the top ten stocks, of which China Merchants Bank Co.Ltd(600036) became the most favored stock by northbound funds.
Huaxi Securities Co.Ltd(002926) said that since this year, the policy has made great efforts to help the economic repair, protect liquidity and improve market expectations, and the banking sector as a whole has achieved absolute and relative returns. At present, the sector valuation corresponding to Pb is still at a low level of about 0.64 times. In the future, we need to pay attention to the repair trend and rhythm of the overall economy.
Galaxy Securities pointed out that with the overweight of stable growth policy and the gradual release of macroeconomic underpinning effect, the banking industry is facing the opportunity of repairing credit demand and continuously improving asset quality. At present, a number of listed banks have disclosed the performance express of 2021, the growth rate of revenue continues to improve, the net profit maintains rapid growth, the non-performing rate and provision coverage perform well, and the overall fundamentals are stable and good, which supports the valuation. At present, the Pb of the sector is 0.65 times, which is at a historically low level and has good configuration value.
Looking forward to 2022, Ping An Securities said that from the perspective of the performance express, under the downward pressure of the economy in the fourth quarter of 2021, the fundamentals of most listed banks remained stable, the revenue growth rate increased steadily, the asset quality was generally stable, the assets and liabilities expanded steadily at both ends, and the profit growth rate maintained high growth. In the first quarter of this year, the gradual implementation of the steady growth policy is expected to support the fundamentals of banks. At present, the sector is still at an absolute low in history, with a full margin of safety. It is optimistic about the valuation repair opportunities of the sector under the overly pessimistic expectation of the economy and the quality of bank assets.
Shanxi Securities Co.Ltd(002500) said that although the reduction of LPR interest rate will bring some pressure on the income side of banks, with the gradual transmission of loose monetary policy to the real economy, it will lead to the recovery of credit volume and the improvement of profitability of the real economy, and banks will benefit from asset quality and credit supply. On the premise that the policy underpinning economy and industry prosperity are expected to improve, the sector valuation is expected to continue to repair. Among them, some urban commercial banks that rely on the vitality of regional economic development have low valuation, perfect business layout, steady and upward profitability and excellent asset quality, and are expected to have large development space.
